Markets
Zodia Markets Agrees to Purchase Elwood Technologies Trading Desk
Zodia Markets, a cryptocurrency-focused trading firm backed by Standard Chartered’s venture arm, said it is buying Elwood Technologies’ over-the-counter trading division, confirming media reports the unit was on the block AND sales negotiations were underway.
After divesting the business, Elwood, backed by billionaire cryptocurrency advocate Alan Howard, will focus on its trading technology software-as-a-service (SaaS) products and services, the company said Monday.
Confidence is high in the institutional cryptocurrency sector, with regulated projects backed by banks and qualified custodians creating a trading infrastructure foundation to meet the needs of traditional capital markets.
Zodia Markets’ OTC business now handles trading volumes of up to $60 million per day, according to CEO Usman Ahmad. He did not share details about how much client volume Zodia is likely to receive from the deal, but said in an email that the company expects to “significantly increase daily volumes.” He also declined to share financial terms of the deal.
Standard Chartered, which was recently reported to enter the cryptocurrency spot trading industry, he is a backer (through his business SC Ventures) of both Zodia Markets and its sister company, Zodia Custody.
Usman said the deal would not overlap with Standard Chartered’s cryptocurrency trading aspirations. “This transaction is a growth enabler for Zodia Markets and does not overlap with what Standard Chartered may or may not do directly in spot cryptocurrency trading,” he said.
Cryptocurrency markets, coming off a long bear market, remain volatile. Elwood CEO Chris Lawn said the decision to sell the OTC business was not about a bull or bear market, but rather an illustration of how the digital asset space is maturing, with new entrants demanding institutional-grade SaaS solutions.
“Increasing competition and M&A will force companies to ask tough questions about who and what they really are,” Lawn said in an email. “For us, the answer is that we are a technology company, hence the strategic decision to focus all of our efforts on this part of our business and sell the OTC business.”