Global banks continue to expand their cryptocurrency-related capabilities, with British multinational bank Standard Chartered raising new funding for its crypto platform Zodia.
Standard Chartered-backed cryptocurrency custody subsidiary Zodia Custody has raised $36 million in a new Series A funding round, Bloomberg reported April 27.
Zodia Custody CEO Julian Sawyer reportedly said Japanese financial conglomerate SBI Holdings led the fundraising to become Zodia's second-largest shareholder. Prior to this funding round, London-based Zodia had exclusive backing from Standard Chartered Bank, which owns 90 percent of the company, and Northern Trust. It remained the majority shareholder after the fundraising, according to Sawyer.
The CEO of Zodia emphasized that raising external funding after a subsidiary has grown to a certain level is typical of Standard Chartered's venture capital strategy, noting:
"Having bank support is part of our strategy, and all the benefits that come with it," he said. "That doesn't mean there has to be a bank."
With new funding, Standard Chartered's Zodia plans to increase number of cryptocurrencies supported, including collateralized Ether. “Ethereum staking is a way to earn returns by 'staking' your assets. With recent changes to the Ethereum protocol, we've seen an in crease in customer demand for these services,".
The company will also use the fresh capital to expand geographically beyond its current markets in Europe and Asia. The company is particularly interested in opportunities in the Middle East, but it plans to stay away from the US due to regulatory uncertainty.
Sawyer noted that there is significant uncertainty about which cryptocurrencies should be considered securities in the United States. “We hope the US will clarify this, but at the moment it's fair to say it's hard to see what's going to happen in the next 12 to 18 months,” the chief executive added. The news comes shortly after Zodia expanded its operations in Japan through a joint venture with SBI Holdings in February. Like the global Zodia unit, its Japanese spin-off is aimed at institutional investors only. The joint venture is 51 percent owned by SBI's crypto arm, SBI Digital Asset Holdings, and 49 percent by Zodia Custody.
Standard Chartered, one of the UK's largest banks, initially announced plans to offer institutional custody for cryptocurrencies such as bitcoin, Back to 2020. Launched in 2021, Zodia has survived the crypto bear market of 2022 and major industry crashes like FTX and Celsius. The The platform currently supports 38 cryptocurrencies and a large number of ERC-20 tokens.
Zodia Custody is registered with the Financial Conduct Authority to operate in the UK. The company also holds registrations with the Central Bank of Ireland and the Luxembourg Financial Industry Supervisory Commission.
