Zodia Markets, the crypto subsidiary of British multinational Standard Chartered, is reportedly in discussions to acquire Elwood Capital Management, a crypto firm backed by billionaire hedge fund manager Alan Howard. According to Bloomberg’s report on July 9, the deal, which includes over-the-counter (OTC) crypto trading and settlement services, is anticipated to close before the end of this month.
Strategic Acquisition for Licensing and Services
A source familiar with the deal reported that Zodia Markets’ acquisition of Elwood Capital would provide the firm with licenses as a virtual asset provider and investment business in Jersey, a British crown dependency off the coast of Northern France. This move is expected to bolster Zodia’s efforts to focus on OTC settlement services, which are an area of growing importance in the crypto market.
Zodia Markets was launched by Standard Chartered in 2021 as a joint venture between the bank’s venture capital subsidiary and Hong Kong’s BC Technology Group. Despite its initial promise, the firm shuttered its services earlier this year due to tepid demand for crypto products, as noted by the firm’s CEO, Usman Ahmad, in a June interview with Bloomberg.
Alan Howard’s Strategic Shift
Alan Howard, the billionaire hedge fund manager of Brevan Howard Asset Management, allegedly began divesting several of his private holdings in crypto companies in February. His strategy involves reinvesting the proceeds into Brevan Howard Digital, the hedge fund’s crypto subsidiary. This realignment indicates Howard’s commitment to strengthening his digital asset portfolio through Brevan Howard Digital.
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Standard Chartered’s Expanding Crypto Footprint
Standard Chartered has been actively working to expand its presence in the crypto industry. On June 21, reports emerged suggesting that the bank might be looking to launch its own trading desk for Bitcoin (BTC) and Ether (ETH). If implemented, this initiative would position the bank Standard Chartered as one of the first global banking institutions involved in the spot trading of cryptocurrencies, marking a significant milestone in the banking sector’s integration with the crypto market.
The potential acquisition of Elwood Capital Management by Zodia Markets represents a strategic move in the evolving landscape of cryptocurrency trading and settlement services. By integrating Elwood’s capabilities, Zodia Markets aims to enhance its service offerings and regulatory standing. This aligns with Standard Chartered’s broader strategy to solidify its role in the burgeoning crypto industry.
Future Prospects of the Standard Chartered’s Crypto Involvement
The crypto update suggests that this acquisition is more than a simple business expansion; it’s a signal of the growing institutional interest in the crypto sector. Standard Chartered’s involvement through Zodia Markets shows a commitment to shaping the future of digital finance. The acquisition will likely inspire other financial institutions to explore similar ventures, thereby increasing the legitimacy and adoption of crypto assets globally.
Conclusion
The ongoing talks between Zodia Markets and Elwood Capital Management highlight the dynamic nature of the crypto industry, where established financial institutions like Standard Chartered are increasingly seeking to deepen their involvement. The potential acquisition underscores the strategic importance of obtaining regulatory licenses and expanding service offerings to meet the growing demands of the crypto market. As Standard Chartered continues to explore opportunities within the crypto space, including the possible launch of a trading desk for BTC and ETH, the bank is poised to become a significant player in the global crypto landscape. Stay tuned with The BIT Journal to keep up with the developments on this update.
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