Standard Chartered’s Crypto Unit Raises $36 Million In New Funding

Key Points:

• Standard Chartered’s crypto custodial subsidiary, Zodia Custody, raised $36 million in financing sponsored by Japan’s SBI Holdings.
• The funds will be utilized to expand geographically and enhance token coverage, as well as to strengthen interchange and off-exchange settlement services.

Zodia Custody, Standard Chartered’s crypto asset custodian, just secured $36 million in investment.

According to Bloomberg, the majority of the funding was supplied by SC Ventures, the venture arm of Standard Chartered, and Japanese giant SBI Holdings, together with other undisclosed investors. The company’s value was not revealed.

SBI Holdings is currently the company’s second-largest stakeholder, behind Standard Chartered, which owns the bulk of the company. Only Standard Chartered and Northern Trust previously funded Zodia. The former owned 90% of the corporation.

The new investment round plainly indicates a dilution of StanChart’s shareholding. Julian Sawyer, Zodia’s Custody Chief Executive, declined to comment on the company’s ownership structure after the investment round.

Sawyer stressed that it is reasonable for Standard Chartered’s venture strategy to seek outside capital, particularly if units reach a certain scale. He expanded on this by saying:

“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.”

Zodia will utilize the funds to acquire additional digital assets, including staked Ether. Sawyer claimed that after Ethereum’s Shanghai upgrade, there had been a desire for the same. The fresh investments will also be used by the custodian to expand its off-exchange settlement network.

Zodia also plans to redirect cash for global growth. Zodia will utilize the cash to expand beyond its current markets in Europe and Asia, according to Sawyer, who added that the company is particularly interested in potential in the Middle East. The United States, on the other hand, is off the table for the foreseeable future owing to “uncertainty in its regulatory path.”

“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 US 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.”

Others in the companies, in addition to Standard Chartered’s Zodia, are capitalizing on the rising demand. According to a source familiar with the plans, the former chief technology officer (CTO) and chief information security officer (CISO) of venture capital company Andreessen Horowitz (a16z) are launching an institution-focused bitcoin custody service.

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Harold

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