Prime broker CyberX is rolling out cross-exchange portfolio margin for derivatives

Quick Take

  • The goal is to enable institutions to trade and manage their margins across exchanges from one single account
  • CyberX is running internal tests with invited clients and expects to go officially live in the coming months
  • Portfolio margins across different venues can be managed without involving on-chain transactions

Crypto prime broker CyberX is rolling out a cross-exchange portfolio margin product for spots and derivatives trading.

The Hong Kong-registered prime broker said in an announcement on Wednesday that the product, called CyberX Prime, aims to enable institutional clients to trade and manage their portfolio margins across global crypto exchanges from one single account.

"Everybody is looking to attract more new money from traditional institutions into crypto markets," Wang Hao, founder and CEO of CyberX, said in an interview. "Based on our conversations, while they indicate interests, the overhead for them is still complex, such as connecting to APIs on different exchanges and managing their margins cross-venues." 

According to his estimation based on proprietary data, about 70% of the crypto trading volume at the moment comes from API orders, suggesting a majority of the trades are executed by institutions.

But unlike the traditional financial industry, the crypto market has hundreds of exchanges that offer similar products and services with different account structures, APIs, and siloed collateral management systems, Wang said. "And we want to lower the entrance barrier for new entrants from traditional financial industry."

The firm is currently running internal tests with clients for the product, which is expected to go live in the coming months officially. It now supports integrations with Binance, Huobi, OKEx, Bitfinex, Deribit, and Bitmex, with Coinbase on the pipeline.

"The idea is, for instance, the spot bitcoin on OKEx can be directly used as margin for derivatives at Huobi without involving on-chain transactions," he said. "When there's a significant market swing, you won't have to move around your collateral to meet margin calls on-chain, which can avoid potential network congestion."

CyberX was founded in 2016 by Wang, a former Goldman Sachs trader who co-founded crypto mobile wallet Bihang in 2013 together with Cobo Wallet's co-founder Jiang Changhao. Bihang was later acquired by OKEx.

The company began to offer prime brokerage services in 2019, and the existing core team boasts Wall Street and technology backgrounds, including Morgan Stanley, UBS,  Merrill Lynch, Google, Baidu and Thomson Reuters.

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