Investment Bank Cowen to Custody Crypto for Institutions, Signs Partnership With PolySign
Renowned investment bank Cowen Inc is set to make its foray into the cryptocurrency market.
The firm would offer hedge funds and other asset managers crypto custody service through a partnership with fintech company PolySign Inc, per an official announcement.
Cowen Leads PolySign’s Funding Round
Cowen said that its digital asset investment division would provide crypto custody services to institutional clients, helping them seamlessly secure, access, and leverage Bitcoin and other cryptocurrencies in their portfolios.
As part of the partnership, the bank invested $25 million into PolySign, which is a part of the $53 million funding raised for the firm recently. Other investors include Blockchain.com, Race Capital, Sandia Holdings, and PilotRock Investments.
The custody solutions for the digital assets will be provided by Standard Custody & Trust Company, a subsidiary of PolySign. Standard recently received a trust company charter from the New York State Department of Financial Services.
The CEO of Cowen, Jeffrey Solomon, noted that the heightened demand for crypto assets had intensified the importance of custody service, especially since there is a lack of clear regulations for asset managers. Solomon added,
“The demand is clearly here. We’re going to be able to help a lot of our institutional clients get over the hump and start trading digital assets in the not-too-distant future.”
Founded in 1918 and headquartered in New York, Cowen holds almost $12 billion in assets under management. It is a diversified financial services firm that offers investment banking services, equity, and credit research services.
Cowen also offers sales and trading, prime brokerage, global clearing, commission management services, and actively managed alternative investment products.
Surging Crypto Prices Luring Investment Firms To Take A Closer Look At Crypto
The recent surging crypto prices seem to be luring hedge funds and investment managers into entering the market. Due to the high demand for crypto, wall street banks want to help their clients gain access to digital assets.
However, Goldman and Morgan’s offerings differ from Cowen’s because they only offer indirect access to crypto through futures trading and mutual funds respectively. On the other hand, Cowen plans to actually provide custody for the underlying assets, which no major Wall Street firm has tried before.
Cryptocurrency exchange Gemini has also been winning in the crypto custody business. As of May 11, the exchange had reported about $30 billion worth of assets under management. Gemini works with the likes of BlockFi, CoinList, and WealthSimple.