ODD Report Completed on Arkis
A DeFi Prime Broker
We’re excited to announce our latest Operational Due Diligence (ODD) report on Arkis, a DeFi Prime Broker, now available on Counterparty Catalogue! Arkis is a permissioned prime brokerage protocol that allows institutional lenders and borrowers to facilitate prime broker related credit transactions through a neutral credit settlement layer all on-chain.
Our mission is to enhance transparency and trust in the digital asset ecosystem by providing institutional investors with thorough, third-party due diligence on crypto-native service providers.
You can request the report and explore Arkis’ profile here.
ODD is Even More Vital in Crypto than in Traditional Finance
In the world of traditional finance (TradFi), operational due diligence (ODD) is a given - especially after the dramatic collapse of entities like Lehman Brothers, the fraud of Bernie Madoff, or the futures and commodities brokerage MF Global.
Before institutions entrust their capital to counterparties, they demand thorough operational risk evaluations. When an institution invests in a fund, that fund must have undergone ODD. Similarly, when they onboard with a new prime broker, that broker is required to have undergone ODD as well. In TradFi, comprehensive ODD is non-negotiable.
In crypto, however, we still see many market participants neglecting proper due diligence. Often, the DD process consists merely of a generic due diligence questionnaire (DDQ), without meaningful follow-up on areas of concern. This remains true despite incidents like the collapse of FTX, the insolvency of entities like BlockFi, and the recent Bybit hack.
Yet, conducting effective ODD in crypto is challenging for two key reasons:
Lack of expertise: Many crypto-native participants lack the background or resources to conduct thorough analyses of their counterparties.
Misalignments of frameworks: Traditional ODD frameworks do not translate well into crypto contexts. Applying standard ODD methods gives investors a false sense of security, as crypto fundamentally operates differently from traditional finance.
As operators, we recognize the critical need for crypto-specific ODD that addresses the unique operational aspects of a digital asset business. This is why we launched our ODD services and Counterparty Catalogue - helping institutional investors navigate operational risk in crypto.
What’s in the Report?
Executive Overview
Report Card: Concise snapshot assessing key operational areas and their associated risks.
Risk Summary: Assessment of operational vulnerabilities and governance.
Operation Mapping: Visual diagram illustrating flow of funds between counterparties.
Operations & Risk
Custody: Analysis of Arkis’ key management practices, audits, and gap analysis.
Smart Contracts: Smart contract audit gap analysis.
Trading & Lending: Review of products, collateral management, and risk mitigation frameworks.
Cybersecurity: Incident history, security measures, third party evaluations, and response protocols.
Governance, Compliance & Financial Health
Corporate Structure & Policies: Company leadership, governance, training, and policy framework.
Financial Health: Examination of Arkis’ sustainability, capital structure, and key liquidity metrics.
AML & KYC Practices: Review of onboarding, screening, and monitoring measures.
Legal History: Summary of investigations, lawsuits, and whistleblower programs.
Regulation & Compliance: Overview of licenses, registrations, certifications, and compliance procedures.
Client Protections & Insurance
Client Protections: Analysis of asset segregation practices and policies around the use of client assets.
Insurance Coverage: Details on insurance policies and client protections.
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What You Can Do on Counterparty Catalogue
Explore Counterparty Profiles: Find key details on digital asset service providers, their products, and more.
Send Introductions: Easily connect with service providers to begin introductions.
Access ODD Reports: Request comprehensive third-party evaluations of service providers.
Coming Soon
More ODD Reports: We’re finalizing more reports. Stay tuned!
DigOpp Verifications: We independently verify all licenses, certifications, audits, and more listed on provider profiles, adding credibility and transparency to every listing.
Provider Ratings & Reviews: Share feedback on service providers and read community reviews.
RFP Tool: Submit requests for proposals and get direct responses from providers.
If you’re interested in ODD on specific digital asset service providers or funds, let us know at info@digopp.group.
Disclaimer
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