Copper Now Enables Funds to Create Complex Crypto-Backed Securities

Copper has launched a service that allows institutional investors to create securitized tokens for a range of crypto-based products, from token trackers to complex trading strategies.

• Five funds are already using the "Catalyst" framework to create complex digital asset-based products that can be traded just like a regular stock, the cryptocurrency infrastructure provider said Wednesday.
• Catalyst allows institutional investors to create and trade securitized versions of sophisticated strategies without trading or holding the digital assets themselves.
• The underlying assets are custodied by Copper.
• The funds already on board are using Catalyst to create securitized tokens based around arbitrage, yield and volatility trading strategies, Copper CEO Dmitry Tokarev told CoinDesk.
• Another 10 are in the pipeline to use the service, Tokarev said.
• Each security is an actively managed certificate (AMC), a highly flexible instrument akin to an exchange-traded fund that can be set up and issued in weeks.
• The securities are given an official Swiss-registered International Securities Identification Number (ISIN).
• They will be tradable on regulated European stock exchanges and subject to existing securities regulation.
• Swissquote released its own volatility-tempered bitcoin AMC in November 2017, which is currently tradable on the Swiss SIX Exchange.
• However, Copper's Catalyst is the first offering allowing funds to create and issue crypto-based AMCs, according to Tokarev.
• London-based Copper offers infrastructure services for institutions; it released a trading tool to minimize credit risk exposure earlier this year.