Tech
StanChart Crypto Unit in Talks to Buy Alan Howard-Backed Firm – BNN Bloomberg
(Bloomberg) — Zodia Markets Ltd., the cryptocurrency unit of Standard Chartered Plc, is in talks to buy part of a digital assets firm backed by billionaire hedge fund manager Alan Howard, people familiar with the matter said.
Zodia Markets is closing in on a deal to buy Jersey-based Elwood Capital Management Ltd., which offers over-the-counter trading and settlement services, the people said, asking not to be named because the deliberations are private. The deal is expected to close this month, one person said.
The discussions come as Standard Chartered pushes deeper into digital assets, with Bloomberg News reporting last month that the bank is planning to set up a trading desk for bitcoin and ether. A deal for Elwood Capital would give Zodia Markets licenses as a virtual asset services provider and investment business in Jersey, supporting the firm’s push to focus more on OTC settlement services, one of the people said.
Elwood Capital is part of Elwood Technologies, which was founded by Brevan Howard Asset Management co-founder in 2018. Elwood Technologies raised $70 million from investors including Goldman Sachs Group Inc. and Dawn Capital in 2022. It reported a loss of $16.9 million for the fiscal year ended March 2023, according to its most recent financial statements.
People familiar with the matter did not disclose terms of the proposed deal. Spokespeople for Zodia Markets and Elwood Technologies declined to comment on the talks.
Zodia’s Change of Strategy
Howard, 60, sold a handful of his personal stakes in cryptocurrency companies in February, planning to reinvest the proceeds in Brevan Howard Digital, the cryptocurrency-focused arm of the wealth management giant. Brevan Howard Digital and Elwood Technologies are separate companies.
Standard Chartered launched Zodia Markets in 2021 as a joint venture between its venture capital arm and Hong Kong-based BC Technology Group. Zodia’s crypto exchange debuted in mid-2022, shortly after the sector entered a two-year bear market.
Zodia Markets shut down its platform earlier this year due to lack of demand, Chief Executive Usman Ahmad said in a separate interview last month.
“We were not in the business of predicting the future,” Ahmad said at the time. The firm’s primary focus now is to use its relationship with Standard Chartered to offer high-speed, wholesale cross-border settlement services between fiat currencies and stablecoins, he said.
Zodia Markets has “gone from relatively minimal trading volumes” in the exchange sector to “comfortably above $50-60 million per day” for OTC settlement, Ahmad said.
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