LTP Launches Banking Triparty Custody Solution for Collateralized Margin Trading

Institutional digital asset prime broker LTP has launched a Banking Triparty Solution that uses a custodian bank to hold collateral outside exchanges. According to Foresight News, fiat currency or U.S. Treasuries are deposited into segregated accounts at a custodian bank, with assets held over-the-counter by a licensed bank and not routed through an exchange. The custodian bank reports pledged collateral positions to the exchange daily. Based on these reports, the exchange grants an equivalent credit line to a client-specific sub-account for PM/PM Pro portfolio margin trading. LTP said custody and trading operate in parallel and do not affect each other. It added that cash collateral can be allocated to U.S. Treasuries to generate yield while serving as collateral.