Zerocap, a regulated Australian market maker and liquidity provider, has dramatically scaled its derivatives trading operation by migrating collateral to Fireblocks’ Off Exchange custody solution. The move allowed Zerocap to grow its Deribit trading book from a value measured in the millions to one now sitting in the tens of millions.
Here’s the thing about crypto derivatives trading: it has always carried an uncomfortable paradox. To trade on an exchange, you typically have to park your collateral on that exchange, which means trusting someone else with your assets while simultaneously trying to hedge risk. Fireblocks’ Off Exchange product essentially resolves that tension by letting assets stay within its custody perimeter while still being recognized as valid margin on Deribit.
How the plumbing actually works
The Off Exchange solution, which launched in late 2023 with Deribit as its first integrated exchange, uses on-chain MPC (multi-party computation) wallets to hold trading collateral. Assets remain under Fireblocks’ security architecture through what the company calls programmatic mirroring: the exchange can see the collateral is real and treat it as margin, but the funds never leave the custodian’s control. This eliminates the need for pre-funding exchange accounts, which has historically been one of the biggest operational headaches for institutional crypto traders.
For Zerocap, this wasn’t just a nice-to-have upgrade. The firm had been running dual-custody stacks to manage its derivatives business, a setup that created collateral limitations and constrained how aggressively it could scale its structured products desk. Consolidating everything under Fireblocks removed that bottleneck.
Fireblocks estimates the Off Exchange solution reduces time spent on manual rebalancing and treasury operations by roughly 50%.
A five-year relationship paying dividends
Zerocap’s adoption of Off Exchange didn’t happen in a vacuum. The firm has been building on Fireblocks infrastructure since 2020, using the platform for custody, settlement automation, and connectivity to counterparties. The relationship deepened in 2024 when Zerocap joined the Fireblocks Global Custodian Partner Program. More recently, in September 2025, the firm also joined the Fireblocks Network for Payments.
Zerocap’s growth trajectory includes some notable institutional milestones. The firm has been involved in ANZ Bank’s A$DC stablecoin efforts and participated in Hong Kong’s spot Bitcoin ETF market making.
What this means for investors and the broader market
Counterparty risk has been the single largest barrier to serious institutional participation in crypto trading. Solutions that let firms maintain custody while still accessing exchange liquidity directly address that concern. Every dollar of collateral sitting on an exchange represents unsecured credit exposure to that exchange. The collapse of FTX in late 2022 demonstrated exactly how catastrophic that exposure can become. Off Exchange solutions convert that unsecured exposure into something far more controlled, where assets remain under institutional-grade custody regardless of what happens to the trading venue.
For market makers like Zerocap, the ability to scale from millions to tens of millions in collateral without proportionally increasing counterparty risk is a competitive advantage. More collateral deployed means more capacity to provide liquidity, tighter spreads, and larger order sizes.