Summary:
- The custodian will hold customers’ assets and mirror user deposits on crypto exchanges.
- Zodia dubbed the new service “Interchange”, per reports on Wednesday.
- The crypto custodial company announced the offering at a time when crypto custody concerns remained a trending topic following FTX’s crash.
Zodia, a crypto company that offers digital asset custody services, announced a service touted as a solution to cryptocurrency exchange insolvency. The new service dubbed “Interchange” will mirror client deposits on crypto trading platforms.
This means that the crypto custodian will allow users to deposit their tokens with the platform. Zodia will then mirror client assets 1:1 on their preferred crypto exchanges. In theory, Zodia said Interchange will allow crypto participants to avoid investment losses and maintain access to their crypto even if centralized exchanges like FTX collapse.
FTX Collapse Incentvizes Rethink On Crypto Custody From Zodia And Others
Indeed, the crypto storage company unveiled the service in the wake of FTX’s collapse. Sam Bankman-Fried froze users from withdrawing their funds after Alameda’s balance sheet was leaked.
The leak revealed that the two entities led by SBF were comingled, confirming fears harbored by FTX users and crypto participants alike. FTX eventually filed for Chapter 11 bankruptcy in Delaware. Bankman-Fried also stepped down as CEO but has supposedly remained in the Bahamas.
SBF, once a cryptocurrency tycoon, was the subject of probes, questions, and a congressional inquiry at press time. Congressperson Maxine Waters invited SBF to appear before a Financial services Senate committee and testify to events surrounding FTX’s collapse, although Bankman-Fried turned down the request to the chagrin on the crypto community.
Rep. Waters, and the House Committee on Financial Services:
Once I have finished learning and reviewing what happened, I would feel like it was my duty to appear before the committee and explain.
I’m not sure that will happen by the 13th. But when it does, I will testify. https://t.co/c0P8yKlyQt
— SBF (@SBF_FTX) December 4, 2022
Crypto custody resurfaced as a major topic of discourse within the crypto community, as signaled by tweets from prominent crypto proponents like Binance CEO Changpeng Zhao, Kraken founder Jesse Powell, and Ethereum founder Vitalik Buterin.
Companies also responded to crypto user needs in the wake of FTX’s failure. Ledger, a crypto wallet maker backed by FTX and SBF, unveiled their latest hardware wallet on Tuesday. Hardware wallets provide users with a self-custody option for their crypto, allowing customers to manage their tokens themselves and control their own private keys.
Hardware wallet proponents rallied around a popular cry after FTX locked users out of their assets – “Not your keys, not your coins”.
