The bank is reportedly looking to buy cryptocurrency firm Elwood Capital Management
Standard Chartered’s foray into the cryptocurrency space is heating up again. Their crypto subsidiary, Zodia Markets, is reportedly in advanced discussions to acquire Elwood Capital Management, a crypto firm backed by billionaire hedge fund manager Alan Howard.
The news, first reported by Bloomberg on July 9, suggests the deal could be finalized before the end of the month. This potential acquisition marks a significant shift for Zodia, which initially launched as a cryptocurrency exchange in 2021. However, due to a lack of demand for crypto products, the company was forced to shutter its exchange services earlier this year.
The acquisition of Elwood Capital seems to indicate a strategic pivot for Zodia. Elwood Capital specializes in over-the-counter (OTC) crypto trading and settlement services. Owning Elwood would grant Zodia crucial licenses as a virtual asset provider and investment business in Jersey. This regulatory framework would significantly bolster Zodia’s efforts to establish itself as a major player in OTC settlement, a sector with a different market dynamic compared to exchange trading.
The move by Standard Chartered reflects a broader trend in the financial industry. Traditional institutions are increasingly recognizing the potential of blockchain technology and cryptocurrencies. Standard Chartered itself is considering the launch of its own Bitcoin and Ether trading desk, potentially becoming one of the first major banks to enter the spot trading arena.
For Alan Howard, the potential sale of Elwood Capital could signify a portfolio reshuffle. He recently offered a number of his crypto-related assets for sale, suggesting a potential reinvestment of those funds into Brevan Howard Digital, his hedge fund’s dedicated crypto subsidiary.
Traditional financial institutions like Standard Chartered are cautiously entering the crypto space, exploring different avenues for participation. Whether Zodia’s renewed focus on OTC services, potentially amplified by Elwood Capital’s expertise, proves successful remains to be seen.
