Custodian — The FTX collapse in November 2022 crystallized a structural risk that institutional crypto market participants had underappreciated: exchange counterparty risk. Institutions that held assets on FTX for trading purposes lost those assets when the exchange collapsed. The lesson was stark: assets held on an exchange for trading convenience are, at that moment, a loan to the exchange — and that loan is unsecured. Copper’s ClearLoop had been designed to solve exactly this problem before FTX made it a crisis. The post-FTX institutional custody market validated Copper’s architecture and accelerated its adoption among institutions unwilling to repeat the FTX experience.
Overview
Copper Technologies was founded in 2018 by Dmitry Tokarev in London, with subsequent expansion of operations to the United States. The firm provides MPC-based institutional custody, the ClearLoop off-exchange settlement network, and prime brokerage services for 500+ institutional clients globally. Copper is regulated by the UK’s Financial Conduct Authority (FCA) and Switzerland’s FINMA, with US operations growing substantially in the post-FTX environment as institutional demand for non-exchange custody infrastructure surged.
MPC — Multi-Party Computation — is the core of Copper’s custody technology. Copper’s implementation distributes private key shards across geographically separated secure enclaves operated by different administrative domains, ensuring that no single point of failure or compromise can expose complete key control. Transaction signing requires coordinated computation across multiple enclaves, with the Policy Engine enforcing institutional authorization rules (dual control, time locks, allowlisting) before any transaction can proceed.
ClearLoop is Copper’s defining product innovation — and its primary competitive differentiator. The problem ClearLoop solves: institutional traders need to maintain significant assets on exchanges to trade efficiently, but exchange counterparty risk (as demonstrated by FTX, and previously by MT. Gox, Quadriga, and others) makes large exchange balances dangerous. The traditional solution — keeping minimal exchange balances and funding trades from custody on demand — creates latency that disadvantages institutional market makers and arbitrageurs in high-speed markets.
ClearLoop’s solution is elegant: Copper maintains custody of institutional assets off-exchange, while simultaneously providing a credit facility to exchanges in ClearLoop’s network that allows Copper-custodied institutions to trade as if their assets were on the exchange. When a trade settles, Copper nets the positions at end-of-day and transfers only the net settlement amount between custody and the exchange, rather than moving gross trading positions back and forth. The result: institutions trade with exchange-speed execution while their assets remain in Copper’s custody, never exposed to exchange counterparty risk during the trading day.
The exchanges in ClearLoop’s network include several major institutional platforms. Each exchange in the network essentially accepts Copper’s guarantee of settlement (backed by custodied assets) rather than requiring pre-deposited assets as collateral. This requires significant trust relationships between Copper and exchange counterparties — relationships built through Copper’s FCA and FINMA regulatory status and its institutional client base.
State Street Corporation’s partnership with Copper — where Copper provides the digital asset custody technology for State Street’s institutional digital asset custody offering — is one of the most significant institutional validation events in Copper’s history. State Street’s $43.7 trillion in assets under custody makes it one of the two largest custodian banks globally. When State Street chose Copper as its custody technology partner, it validated Copper’s security model, operational reliability, and compliance infrastructure at the highest institutional standard.
Copper’s expansion into the US market is driven by post-FTX institutional demand and the broader growth of US institutional digital asset allocation. US institutional clients — particularly hedge funds and family offices that had maintained offshore exchange balances — sought domestic regulated alternatives with the counterparty risk protection that ClearLoop provides. Copper’s FCA and FINMA regulatory status, while not providing the Qualified Custodian status that a US bank charter or trust company charter would offer, provides regulatory credibility for institutional clients whose compliance programs permit non-US regulated custodians.
The prime brokerage service — lending against custodied assets, providing financing for leveraged trading strategies, offering tax and reporting infrastructure — expands Copper beyond pure custody into the comprehensive institutional services model that characterizes leading prime brokers. For hedge funds whose trading strategies require leverage, Copper’s prime brokerage capability within the ClearLoop framework provides financing without requiring assets to leave ClearLoop’s safety architecture.
Key Metrics
| Metric | Value |
|---|---|
| Assets Under Custody | $30B+ (2025) |
| Institutional Clients | 500+ |
| Founded | 2018 |
| CEO | Dmitry Tokarev |
| Custody Technology | MPC (Multi-Party Computation) |
| Key Product | ClearLoop (off-exchange settlement network) |
| Regulatory Status | UK FCA, Swiss FINMA |
| Key Partnership | State Street (digital asset custody technology) |
| HQ | London (US operations growing) |
| Prime Brokerage | Yes (lending, financing, reporting) |
Tokenization Activity
Copper’s role in the tokenized asset market intersects with its custody and ClearLoop infrastructure. As tokenized real-world assets (Treasury funds, credit funds, real estate tokens) become a larger portion of institutional portfolios, institutions holding these positions alongside Bitcoin and Ethereum in Copper custody benefit from unified reporting and risk management across the entire digital asset portfolio.
ClearLoop’s exchange settlement model has direct applicability to tokenized security markets: as secondary trading venues for digital securities (tZERO, Securitize Markets, INX) grow in volume, institutional traders will need the same settlement efficiency that ClearLoop provides in crypto markets. Copper’s architecture could extend to tokenized security settlement, providing off-venue custody with net settlement to digital securities ATSs — a model that would significantly improve capital efficiency for institutional digital securities traders.
The State Street partnership creates an important distribution channel for Copper’s technology in the traditional financial institution market. Banks and custodians that want to offer digital asset custody services without building internal MPC infrastructure can deploy Copper’s technology as a managed service, similar to how banks use third-party core banking system providers rather than building proprietary systems. This B2B technology model is scalable in a way that Copper’s direct institutional custody model is not, and represents a potential inflection point in the firm’s growth trajectory.
Investment Relevance
Copper’s investment case is built on two structural advantages: ClearLoop’s unique counterparty risk elimination in institutional trading (a differentiated capability that no other custodian offers at Copper’s scale), and the State Street partnership’s distribution channel into the global custodian bank market. Both advantages became more valuable post-FTX as institutional risk management standards for digital assets tightened.
The US market expansion represents Copper’s largest incremental growth opportunity. US institutional demand for non-exchange custody with exchange-level trading efficiency is substantial and growing, and Copper’s FCA/FINMA-regulated status provides institutional compliance departments with a credible regulatory hook for approving the relationship.
Related Entities
- State Street Digital — Major custody technology partnership client
- Fireblocks — Competitor in institutional MPC infrastructure
- Anchorage Digital — Competitor in regulated institutional digital asset custody
- BitGo — Competitor in institutional digital asset prime brokerage
- Coinbase Prime — Competitor with exchange-integrated institutional custody