Big Bank Crypto Move: Standard Chartered Subsidiary Seeks to Expand OTC Services

The investment bank’s crypto division, Zodia Markets Ltd., is discussing acquiring part of Elwood Capital Management Ltd.

The firm is backed by billionaire hedge fund manager Alan Howard, and the deal is expected to be completed this month, according to a July 9 Bloomberg report citing people familiar with the matter.

Elwood Capital offers over-the-counter (OTC) crypto trading and settlement services.

Big Bank Crypto Acquisitions

The move would be strategic for Zodia Markets, as it would give it licenses as a virtual asset service provider and investment business in Jersey and support a shift towards OTC settlement services.

In June, CryptoPotato reported that Standard Chartered was preparing to launch a BTC and ETH trading desk based in London.

Elwood Capital is part of Elwood Technologies, which was established by Alan Howard in 2018. It raised $70 million from investors, including Goldman Sachs Group.

The billionaire hedge fund manager invested in crypto companies up for sale in January, with plans of reinvesting any proceeds into his firm, Brevan Howard Digital.

Zodia Markets was launched by Standard Chartered in 2021 as a joint venture between its venture capital arm and Hong Kong’s BC Technology Group.

Zodia’s crypto exchange launched in mid-2022 as the industry was entering a bear market and shuttered its services in early 2024, with CEO Usman Ahmad citing a lack of demand.

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 told Bloomberg.

OTC settlement operations now handle $50 to $60 million in daily trading volumes, he added.

SC Bullish on Crypto

Standard Chartered said that cryptocurrencies, especially stablecoins, were a permanent part of the future of finance, in a blog post earlier this year.

“Standard Chartered sees digital assets as an important and permanent part of the future of financial services and recognizes the potential of stablecoins.”

In April, analyst and head of digital assets research at the bank, Geoff Kendrick, said that Bitcoin would trend higher during 2024, potentially reaching its predicted price of $150,000.

However, the asset has been down-trending since its all-time high in March, having corrected 26% from that level last week.