In a dynamic shift within the finance sector, traditional banking institutions are increasingly investing in a variety of cryptoasset exposures, including stablecoins, tokenized assets, ETF products, and cryptocurrencies. However, the Basel III framework tempers this forward thrust, requiring substantial capital reserves against investments that fail to meet exacting standards, alongside rigorous evaluations, and detailed submissions for regulatory scrutiny. To address these challenges, C3 Rules, a leading developer of cryptoasset compliance solutions, has teamed up with HyperRisk Solutions, a leader in regulatory technology software. Their joint effort integrates C3 Rules’ cryptoasset classification and compliance reporting solution with HyperRisk Solutions’ RiskGuard software, creating a comprehensive system for cryptoasset capital calculations.
This integration promises transparency and efficiency in cryptoasset exposure classification and capital calculations, meeting the Basel Committee’s new cryptoasset capital and prudential standards. It offers a modular approach to compliance management, allowing seamless integration with existing risk management infrastructures or complete overhauls for advanced cryptoasset classification services.
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The partnership targets a global userbase of banks and financial institutions. HyperRisk Solutions‘ RiskGuard software is widely used in Southeast Europe, counting eleven leading banks and financial institutions as its clients. The enhanced offering, available world-wide and a global first, will bolster their position in financial innovation and risk management. Markets more advanced in the adoption of regulation, such as Hong Kong, Singapore, and Switzerland, will likely benefit first.
Ben Stolman, CEO at C3 Rules, expressed his enthusiasm about the partnership, stating: “This strategic alliance with HyperRisk Solutions is a game-changer for the financial industry. By combining our cutting-edge cryptoasset classification system with HyperRisk’s robust capital calculation engine, we are setting new standards in risk management and regulatory compliance for banks with cryptoasset exposures.”
Aleksa Jorga, a partner at HyperRisk Solutions, states: “We are excited to start on a partnership with C3 Rules, with its bold and innovative approach to crypto regtech. The classification tool is an organic fit for our RiskGuard suite and prepares us for a future in which cryptoassets may be integrated into the mainstream banking industry. RiskGuard evolved with the Basel framework, with a track record of 15 years, so we are anticipating the next market move.”
Andrew Fei, a partner at law firm King & Wood Mallesons who regularly advises clients on digital assets and Basel standards, observes: “The Basel cryptoasset standards are important because they tell banks how much capital they need to hold against their cryptoasset exposures. The Basel standards require banks to classify each of their cryptoasset exposures into one of four tightly-defined categories, fully document their classification decisions with supporting evidence, and make these available to their banking regulators for review. This is a significant compliance undertaking for banks. Against this backdrop, regtech solutions have the potential to significantly alleviate banks’ compliance burden.”
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