- Sygnum’s Protect platform crossed $1 billion in assets, reflecting rising institutional demand for safer collateral management in crypto.
- Collateral volumes on Sygnum Protect surged more than 900% year-on-year in 2025, with momentum continuing into 2026.
- The platform is attracting a mix of crypto exchanges, hedge funds, market makers, prime brokers, and traditional finance firms entering digital assets.
- A core selling point is that assets are held off the bank’s balance sheet in segregated, bankruptcy-remote accounts, while still being mirrored for trading on exchanges.
Sygnum said assets on its Protect off-exchange custody platform have surpassed $1 billion. Institutional traders are looking for ways to keep collateral with a regulated bank while continuing to trade on crypto platforms during volatile market conditions.
The digital-asset banking group said collateral volumes on the platform jumped more than 900% in 2025, with activity coming from exchanges, hedge funds, prime brokers and market makers, alongside a growing cohort of technology-led traditional finance firms moving into crypto trading.
The development points to a broader shift in how larger firms want to access digital-asset markets. Rather than parking balances directly on an exchange, off-exchange custody structures are designed to separate trading from safekeeping. It allows collateral to be mirrored to a platform for execution while assets remain in bank-grade custody and off the custodian’s balance sheet.
Sygnum launched Protect with Binance in April 2024, expanded it to Deribit in March 2025 and added Bybit in September 2025. Sygnum mentioned last year that member exchange connected to the platform account for more than 50% of global spot and derivatives exchange volumes, based on Sygnum and CoinGecko data.
That model has gained traction as crypto firms and their institutional clients revisit counterparty exposure after past market failures and security breaches. When announcing the Deribit integration last year, Sygnum said a recent major cyberattack had triggered one of the largest waves of exchange de-risking since FTX, reinforcing demand for trading setups that do not require clients to pre-fund crypto platforms with large balances.
Those concerns were sharpened in February 2025, when Bybit disclosed a hack that drained about $1.5 billion from an Ether wallet. The FBI later attributed the theft to North Korea, making the incident one of the largest crypto heists on record and keeping operational resilience, custody standards and exchange risk management squarely in focus for institutions active in the sector.
A key part of Sygnum’s pitch is capital efficiency. Protect accepts traditional assets such as U.S. Treasuries alongside stablecoins and digital assets as collateral, giving institutions a way to reduce direct exchange exposure while still earning yield on posted assets. That proposition comes as Treasury-linked blockchain products continue to grow more broadly: RWA.xyz data shows tokenized U.S. Treasuries at about $10 billion.
“Investor flight-to-trust is gathering pace as market volatility, platform failures and security incidents from previous cycles raise awareness of the critical importance of where their assets are held, and how their risks are managed,” Dominic Lohberger, Sygnum’s chief product officer, said in a statement shared with AlexaBlockchain..
Wintermute, which Sygnum cited as a user of the infrastructure, said off-exchange custody has become a core control for managing counterparty risk in volatile markets and that yield on collateral can help offset operating costs.
The milestone also adds to Sygnum’s push to position itself as institutional market infrastructure rather than simply a crypto service provider. The company says it has regulated operations in Zurich and Singapore and provides services in Luxembourg, Liechtenstein and the UAE. In January 2025, it raised $58 million in a strategic growth round that valued the group at more than $1 billion.
The $1 billion mark for Sygnum’s Off-Exchange Custody shows the changing trading architecture. As digital-asset markets mature, the traditional finance practice of separating custody, collateral management and execution appears to be gaining ground in crypto as well.
The article “Institutional Demand Drives Sygnum Off-Exchange Custody Assets Past $1 Billion” was first published on AlexaBlockchain. Read the complete article here: https://alexablockchain.com/Institutional-Demand-Drives-Sygnum-Off-Exchange-Custody-Assets-Past-1-Billion/
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