Bitget moves institutional collateral to Sygnum’s off-exchange custody

Institutional crypto trading has a trust problem. Not trust in the technology, but trust in what happens to your collateral when it sits on an exchange’s balance sheet. Bitget and Sygnum Bank think they have an answer. The two companies announced Thursday that Bitget’s institutional clients can now hold their trading collateral through Sygnum Protect, the Swiss digital-asset bank’s off-exchange custody platform. Collateral moves into segregated, bankruptcy-remote accounts governed by Swiss law, while Bitget mirrors the position for live trading purposes. In practical terms: the assets never actually touch the exchange’s books. The exchange sees the collateral, can trade against it, but cannot commingle it with its own funds or creditors’ claims. Why this matters more than it sounds When FTX collapsed in 2022, customer assets that sat on the exchange’s balance sheet became creditor claims overnight. Clients waited in line with everyone else. Off-exchange custody sidesteps that entire scenario. Assets held in legally ring-fenced accounts under a regulated Swiss bank are structurally insulated from exchange insolvency, which is a very different risk profile than a standard exchange de...