Deutsche Bank’s asset management arm is in talks to invest in two German cryptocurrency companies, according to people familiar with the matter.
According to a Bloomberg story on Feb. 8, DWS Group CEO Stefan Hoops is in talks to buy a minority stake in Deutsche Digital Assets, a provider of exchange-traded crypto products. He is also in talks with Tradias, a market-making company owned by Bankhaus Scheich; a traditional financial market maker.
Hoops has been optimistic about the opportunities in the digital asset space.
During a recent earnings call, the executive said that DWS has “started evaluating strategic partners and doing due diligence on potential targets” where it hopes to gain a foothold, including digital assets.
Falling digital asset prices could lead to “interesting opportunities” for DWS, he said.
Speaking of the bank’s strategy for the crypto industry, Hoops mentioned a plan to build or acquire “various specific blockchain-related services.”
According to the Deutsche Digital Assets website, the company offers investors exposure to crypto assets through a variety of investment vehicles, ranging from passive funds to actively managed funds, as well as white-label services for asset managers.
Tradias is an over-the-counter (OTC) cryptocurrency and security token trading platform created by Bankhaus Scheich in 2020, offering crypto lending and liquidity services.
The cryptocurrency investment is reportedly one of DWS’s efforts to revive growth and restore its reputation after allegations of tax fraud and environmental whitewashing led to investigations in Germany and the United States.
The offices of DWS and Deutsche Bank were raided in May 2022 by the Frankfurt prosecutor’s office, after finding “sufficient evidence” that ESG standards applied only to a minority of assets, contrary to what they claimed in their marketing.
Germany is considered one of the strongest “traditional tax” crypto economies that rewards long-term investors, as the country does not tax crypto holdings of more than one year.
According to a cryptocurrency ranking conducted in October, which assesses factors such as cryptocurrency prospects, clarity of tax rules, and increased transparency of regulatory communication, Germany ranks among the most favorable economies.
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