Counterparty risk is limited on LGO Markets’ platform because no single party has unilateral control over customer funds. Rather, control is shared among the client, our regulated clearing, banking, and custodian partners, and LGO Markets. More precisely, each client’s fiat funds are stored in a client-specific and segregated bank account, owned by client and held by a third party bank.
Each client’s digital assets are held in a client-specific and segregated 2-of-3 multisignature wallet. The three keys of this wallet are held by the client, LGO Markets and a 3rd party clearing firm. Two of these keys are needed to move digital assets out of the wallet for clearing or withdrawal purposes, which prevents any party involved of moving assets unilaterally.
Finally, our clearing and settlement process allows both parties to a transaction to operate on the platform without having to trust the other side.