Standard Chartered’s crypto asset custodian, Zodia Custody recently raised $36 million via funding. Japan’s SBI Holdings led the latest round. SBI Holdings is now the firm’s second-largest shareholder, with Standard Chartered owning the majority of the ownership. Zodia was previously backed by only Standard Chartered and Northern Trust. The former held a 90% stake in the company.
The completion of the latest funding round clearly marks a dilution of StanChart’s ownership. However, the exact figure remains unclear at the moment. Julian Sawyer, the Custody Chief Executive at Zodia did not provide details on the structure of its ownership post the funding round. Sawyer emphasized that it’s natural for Standard Chartered’s venture strategy to raise outside funding, especially after units reach a particular size. Elaborating on the same, he added,
“It is part of our strategy to be bank-backed, and all the good things that brings. That doesn’t mean there has to be a single bank.”
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New funding will be used for geographic expansion, add assets like staked Ethereum
Zodia will use the funding to add more digital assets under its purview, including staked Ether. Sawyer revealed that there has been a demand for the same post-Ethereum’s Shanghai upgrade. The custodian will also use the latest investments to develop its off-exchange settlement network. Alongside, Zodia also intends to divert funds for geographic expansion. It is looking beyond its current markets in Europe and Asia. Sawyer said that the firm is interested in opportunities in the Middle East.
Nevertheless, the U.S. is not on the radar for now, owing to “uncertainty in its regulatory roadmap.” Well, Zodia is not alone. Several companies have been steering away from the U.S. and are eyeing the Middle East, Hong Kong, and Europe for expansion. Sawyer said,
“As an industry, there’s a challenge in terms of which regulatory body is managing crypto, and what assets are classed as securities. We hope the U.S. creates that clarity, but at the moment, it’s fair to say that it’s difficult to see what that will be in the next 12 to 18 months.”
Alongside Standard Chartered’s Zodia, others from the industry are also tapping into the growing demand. Andreessen Horowitz’s [a16z] Ex-Chief Technology Officer and Chief Information Security Officer are reportedly looking to launch an institution-inclined crypto custody firm. In fact, the executives allegedly have the “blessing and seed backing” of the VC giant as well.
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