Market makers, OTC desks, others join digital asset settlement network Lynq as first institutional clients
Lynq, a digital asset settlement network developed by Arca Labs, Tassat, and tZERO Group, is onboarding its first institutional clients, according to an announcement on Tuesday. The initial cohort includes 1Konto, StoneX, Archax, FinchTrade, GSR, JST Digital, and 677 Financial Group, among others.“Together, these firms represent a cross-section of the digital asset ecosystem and include leading market makers, OTC desks, and institutional liquidity providers, who bring meaningful volume and operational scale to Lynq,” the project said in a statement.Launched in mid-July, Lynq is a real-time, interest-bearing settlement platform designed for institutional digital asset transactions. Its founding team likes to say it was built “by the industry, for the industry,” in that it uses the Arca Institutional U.S. Treasury Fund (TFND), a tokenized fund issued on the Avalanche blockchain, to enable instantaneous transfers between crypto industry counterparties 24/7.Capital managementThe platform was designed, in part, to address the capital management gaps left following the collapse of Signature and Silvergate banks, which had previously managed a significant amount of inter-firm transfers between market participants. Both banks were targeted during the Biden-era crypto banking crackdown, now known as Operation Choke Point 2.0, following the collapse of FTX.Notably, Tassat is the firm behind Signature's Signet system, which was introduced in 2019 to enable peer-to-peer payments among the bank’s clients using tokenized deposits. The system functioned similarly to Silvergate’s SEN program, which regulators targeted due to allegedly lax controls.Using Arca’s tokenized money market fund enables the system to execute settlement without resorting to banking networks while also offering a so-called “yield-in-transit” system, which accrues interest for users on their intraday holdings. tZERO, which holds broker-dealer and special purpose broker-dealer licenses, provides KYC onboarding and other compliance functions. According to the announcement, upwards of 50 clients are in some stage of onboarding. Market makers B2C2, Galaxy Digital, and Wintermute have all previously said they plan to use the system.U.S. Bank is providing treasury management services and acting as Lynq’s qualified cash custodian.The move comes at a time when many legacy firms are rethinking their attitudes towards crypto and blockchain. JPMorgan, for instance, is considering launching a tokenized deposit coin called JPMD, while many other banks consider launching their own or integrating other stablecoins for settlement purposes. Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.© 2025 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.