Standard Chartereds Zodia Markets Plans to Acquire Alan Howard-Backed Crypto Firm: Report

Zodia Markets, Standard Chartered's crypto subsidiary, is in talks to acquire Elwood Capital Management, a crypto company backed by hedge fund billionaire Alan Howard, Bloomberg reported, citing people with knowledge of the matter.

Although the deal has not been officially confirmed yet, it is reportedly expected to be closed before the end of this month. However, the financials and other details of the deal remain unknown.

An OTC Crypto Service Provider

Elwood Capital offers over-the-counter crypto trading and settlement services. It operates with licenses as a virtual asset provider and investment business based on the island of Jersey, an offshore territory of Britain.

The acquisition deal looks strategic as it would provide Zodia Markets with access to new licenses and open new markets. Zodia Markets can also expand its services to OTC settlements.

Zodia Markets is the crypto exchange arm set up in 2021 by the British multinational lender, Standard Chartered, as a joint venture between its venture capital subsidiary and Hong Kongs BC Technology Group. However, the services were shuttered earlier this year due to the struggling demand for cryptocurrency products.

Last year, Zodia Markets closed its Series A funding round, raising $36 million. It also received virtual asset service provider registration in Ireland last year, a crypto asset registration from the UKs Financial Conduct Authority in July 2022 and in-principal approval from Abu Dhabi Global Markets in September 2023.

Standard Chartereds Growing Presence in Crypto

Notably, Zodia Custody is an unrelated entity that provides cryptocurrency custodial services and is jointly owned by Standard Chartered, SBI Holdings, Northern Trust, and National Australia Bank. Interestingly, Standard Chartered is also reportedly looking to launch a dedicated Bitcoin trading desk, which, if materialised, would make it one of the first financial institutions to be directly involved with spot crypto trading.

Meanwhile, Brevan Howard Asset Management, the hedge fund of Alan Howard, is also focused on crypto as it listed several private holdings for sale in February, with the intention of reinvesting the earnings into its crypto subsidiary, Brevan Howard Digital.

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National Australia Bank Invests in Crypto Firm Zodia Custody

National Australia Banks venture capital arm, NAB Ventures, has invested in Zodia Custody, a move that highlights the growingacceptance of cryptocurrency solutions in the traditional banking framework.

Zodia Custody's Australian Expansion

Zodia Custody, a platform known for itsinstitution-grade cryptocurrency and digital asset storage, established itsoperations in Australia in late 2023. According to Coindek, the exact amount ofNAB Ventures' investment in the entity remains undisclosed.

Following the investment, Zodia Custody is focusing ononboarding Australia's unique ecosystem of home-grown digital asset exchanges.Many of these exchanges are transitioning their assets to the Zodia platform inanticipation of stricter regulatory requirements expected to be implemented by2025.

NAB Ventures takes a stake in bank-backed global digital asset custodian Zodia Custody https://t.co/Ou72idgTtw pic.twitter.com/MLCN2FjxSy

Major financialplayers such as Standard Chartered, Northern Trust, and SBI Holdings support Zodia Custody. The latest investment from NAB is part of Zodia's broader strategy to become the custodian ofchoice for digital asset ETFs awaiting approval from the Australian SecuritiesExchange.

Lately, Zodia Custody has been expanding its globalfootprint. In March, the company extended its crypto security services to financial institutions in Hong Kong. Founded in 2020, the UK-based crypto arm ofStandard Chartered mentioned that it aims to meet the institutional demand forcrypto asset storage in the region.

Expanding Services Globally

This move followed the firms expansion intothe Asia-Pacific region, including Australia. According to Zodia, financialinstitutions in Hong Kong have expressed an increasing interest in cryptoassets, creating an ideal client base for investment. Previously, Zodiaextended its operations to Japan, Singapore, and Australia. Zodia also introduced SAF3, a digital asset custodyplatform specifically designed for institutional clients in Australia.

The digital assetfirm is also reportedly considering future partnerships and is open to clientsfrom jurisdictions outside of its current operational footprint. Besides that, ZodiaMarkets, a digital asset exchange and brokerage platform, obtained approval as a virtual asset service provider from the Central Bank of Ireland lastyear.

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Zodia Custody Secures TCSP License in Hong Kong for Digital Asset Custody

Zodia Custody (HK) has been granted a Trustor Company Service Provider (TCSP) License in Hong Kong. This license,supported by Standard Chartered, represents a pivotal moment for theinstitution-first provider of digital asset custody solutions.

Meeting Institutional Demands

With the acquisition of the TCSP License, Zodia Custody (HK)is poised to offer comprehensive custody services for digital assets under theTCSP Licensing Regime. Hong Kong stands as a critical hub within the globaldigital asset ecosystem. The licensing enables Zodia Custody (HK) to cater tothe demands of both local and international institutional clients effectively.

Zodia Custody(HK) emphasized the importance of this milestone in solidifying the firm'sposition as a known player in the digital asset custody market in Hong Kong.They highlighted the significance of offering a regulated platform that adheresto TCSP requirements, ensuring trust and reliability for institutional clients.

The TCSP License opens avenues for Zodia Custody (HK) toprovide institutions operating in the region with a trusted platform. Bycomplying with regulatory frameworks, the firm aims to offer an infrastructurethat meets the stringent standards of the industry, bolstering confidence amongstakeholders.

Zodia Markets' Global Footprint Growth

In the past year, ZodiaCustody expanded its crypto security services to Hong Kong's financialinstitutions, aligning with institutional demand for crypto asset storage,as reported by Finance Magnates.Originating in 2020 as the UK-based crypto arm of Standard Chartered, Zodiaaimed to penetrate the Asian market, including recent ventures in Japan,Singapore, and Australia. In Australia, the introduction of SAF3, a digitalasset custody platform tailored for institutional use, highlighted Zodia'semphasis on responsible adoption.

Furthermore, Zodia Markets secured registration as a VirtualAsset Service Provider with the Central Bank of Ireland, enhancing itscredibility. Earlier, the company obtained In-Principle Approval from the AbuDhabi Global Market, paving the way for regulated operations in the Middle Eastand Africa.

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Standard Chartered raises $36m for crypto custody platform

Standard Chartered's crypto custody subsidiary, Zodia Custody, has raised $36 million in a series A funding round led by SBI Holdings. Standard Chartered remains the majority shareholder in the firm. (Read More)

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Standard Chartereds crypto custodian Zodia to raise $50M

Backed by several financial firms, Zodia expects to tap more diverse investors with a planned $50 million raise.

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UK crypto rules unclear for firms avoiding Europes MiCA regulation

While some industry execs believe that MiCA could trigger a shift from the EU to the UK, others question the UKs unclear crypto regulations.

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