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Zodia Custody seeks $50 million to grow as competition heats up

Zodia Custody seeks $50 million to grow as competition heats up

GrafaGrafa2024/11/05 14:00
coin_news.by:Isaac Francis

Standard Chartered’s crypto custody arm, Zodia Custody, is looking to raise $50 million to ramp up its services as competition heats up in the crypto custody space.

Unlike previous rounds where funding came from traditional financial institutions, Zodia is now reaching out to angel investors and companies involved in tokenisation and payments for this latest funding effort.

Architect Partners, a firm specialising in crypto advisory, is reportedly assisting Zodia in securing this round of financing.

The push for $50 million follows Zodia's previous funding success, where it raised $36 million in a Series A round led by SBI Holdings, making SBI the second-largest stakeholder in Zodia after Standard Chartered.

Competition in the crypto custody space is stiff, with traditional financial giants like BNY Mellon, State Street, and Citigroup now offering digital asset custody services alongside established crypto firms like Komainu.

As more institutional investors seek safe ways to hold cryptocurrencies, the demand for secure custody solutions is climbing, despite ongoing security concerns and a history of cyberattacks in the sector.

These institutions want exposure to digital assets, but the risks tied to crypto—such as theft and volatility—mean secure custody solutions are essential for managing these assets safely.

Zodia’s focus on expanding its market reach and developing new products aims to meet the growing demand as more institutions explore digital asset investments.

The increasing interest in crypto custody comes amid challenges, as fees and regulatory uncertainty continue to pose potential roadblocks for widespread adoption.

Regulatory ambiguity around digital asset custody could make some institutional clients hesitant, especially in regions where crypto laws are still evolving or unclear.

Although Zodia is part of a major bank, the broader digital asset ecosystem includes many custody providers, some of which offer competitive services at lower fees, adding pressure for Zodia to differentiate.

Experts believe that as traditional finance and crypto-native firms continue to enter the custody market, the space will only become more competitive, with each firm vying to offer more secure and cost-effective solutions.

With this funding round, Zodia hopes to strengthen its position in the digital asset market, providing trusted custody solutions that appeal to institutional clients wary of the crypto market’s high-risk reputation.

As Julian Sawyer, CEO of Zodia Custody, emphasised, this strategic expansion will help the company tap into a broader investor base, particularly those interested in the evolving digital asset sector.

Despite its challenges, the custody business is becoming a core part of the digital asset ecosystem, as investors seek secure ways to manage their cryptocurrency exposure without directly handling these assets.

 

 

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