Standard Chartered’s spin-off crypto custodial unit Zodia Custody Ltd. closed $36 million in new funding as part of a round led by Japan’s SBI Holdings, the digital-asset firm said on Thursday, marking a dilution of the British bank’s ownership over its subsidiary.
London-headquartered Zodia was previously backed solely by Standard Chartered and Northern Trust, with Standard Chartered owning a 90% stake in the business. Zodia Custody Chief Executive Julian Sawyer declined to provide details on the exact makeup of its ownership after the round, but said Standard Chartered remains the majority owner.
The series A fundraise, which also saw the bank’s venture arm SC Ventures participate, followed the launch of Zodia’s business in Japan as a joint venture with SBI Holdings in February. SBI Holdings is now the firm’s second-largest shareholder, Sawyer said in an interview, adding that it’s typical of Standard Chartered’s ventures strategy to raise outside funding after a unit reaches a certain size.
“It is part of our strategy to to be bank-backed, and all the good things that that brings,” he said. “That doesn’t mean there has to be a single bank.”
Zodia will use the funds for geographic expansion beyond its present markets in Europe and Asia, Sawyer said, adding that the firm is also interested in opportunities in the Middle East. However, the US is off the table for the foreseeable future due to “uncertainty in its regulatory roadmap.”
“As an industry there’s a challenge in terms of which regulatory body is managing crypto, and what assets are classed as securities,” he added. “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.”
The funding will also be used to add more digital assets to Zodia’s coverage — including staked Ether, which Sawyer said has been in demand from the market following a key network upgrade for the Ethereum blockchain this month — and further develop its off-exchange settlement network.
Zodia Custody was established targeting institutional investors in digital assets in late 2020, on the cusp of the last crypto bull market, alongside a separate crypto trading platform Zodia Markets. Since then the fortunes of the digital asset sector have soured amid a string of company collapses, falling valuations and scandals.
