Global banks continue to expand their cryptocurrency-related capabilities, and British multinational bank Standard Chartered has secured new funding for its cryptocurrency platform; Zodia.
Zodia Custody, the Standard Chartered-backed cryptocurrency custody affiliate, has raised $36 million in a new Series A funding round, Bloomberg reported April 27.
Japanese financial conglomerate SBI Holdings has led the fundraising, becoming Zodia’s second largest shareholder, Zodia Custody CEO Julian Sawyer has reported.
Prior to the funding round, the London-based company was backed exclusively by Standard Chartered and Northern Trust, with Standard Chartered owning a 90% stake in the company. This remains the majority shareholder after the fundraiser, according to Sawyer.
The Zodia CEO highlighted that it is typical of Standard Chartered’s risk strategy to obtain external financing after a subsidiary grows to a certain level, stating:
“It’s part of our strategy to be backed by banks, and all the good things that come with that,” he said. “That doesn’t mean there has to be just one bank.”
With the new funding, Zodia plans to increase the number of supported cryptocurrencies, including staked Ether (ETH).
The company will also use the new funds for geographic expansion beyond its current markets in Europe and Asia. The company is especially interested in opportunities in the Middle East, but plans to stay away from the United States due to regulatory uncertainty.
Sawyer noted that there is a huge lack of clarity regarding which cryptocurrencies should be considered securities in the United States. “We hope the United States believes that clarity, but at this point, it’s fair to say that it’s hard to see what it will be in the next 12 to 18 months,” the CEO added.
The news comes shortly after Zodia expanded its business in Japan through a joint venture with SBI Holdings in February. Like Zodia’s global division, its Japanese subsidiary targets institutional investors only. The joint venture is 51% owned by SBI Digital Asset Holdings and 49% owned by Zodia Custody.
Standard Chartered, one of the largest banks in the UK, originally announced plans to offer institutional custody for cryptocurrencies such as Bitcoin (BTC) in 2020. Launched in 2021, Zodia has survived the 2022 cryptocurrency bear market and major industry crashes, like those of FTX and Celsius.
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