Zodia Custody has registered with the Financial Conduct Authority (FCA), meaning it is now providing commercial services to clients as a crypto asset business in the United Kingdom.
The London-based institutional-grade cryptoasset custody solution is owned by SC Ventures, the ventures and innovation arm of Standard Chartered, and Northern Trust.
The firm aims to satisfy institutional investors’ need for a cryptoasset custodian that understands traditional custody and meets investors’ high standards and expectations, whilst maintaining the flexibility required to adapt to the ever-changing cryptoasset market.
Zodia Custody was granted FCA registration under the UK’s Money Laundering Regulations along with other eight cryptoasset businesses. The firm has already initiated commercial operations following a period of testing.
The business is now supervised under the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017 in the United Kingdom, a regime that brought cryptoassets into scope in January 2020.
Zodia will soon launch custody services for the two most traded cryptoassets, Bitcoin and Ethereum, as the firm prepares an expansion to more cryptoassets depending on client demand.
Maxime De Guillebon, Chief Executive Officer at Zodia Custody, said: “Zodia Custody marks an exciting development for the institutional custody market. We deliver bank-grade cryptoasset custody to a standard expected of world-leading global custodians, having been developed with long-established best practices and regulatory compliance in mind.
“By leveraging the best practices of Standard Chartered and Northern Trust, we give institutional clients the comfort that their and their investors’ assets are kept in a manner that is aligned with the more traditional asset markets. This underpins our mission to increase the accessibility of the cryptoasset market for a wider institutional audience.”
Alex Manson of SC Ventures, said: “We believe cryptoassets as an asset class is here to stay. We set up Zodia Custody with the clear goal of serving institutional investors who want to invest in cryptoassets in a sustainable, safe and responsible way. Our aspiration is to lift standards, grow the ecosystem and help a nascent industry mature, becoming more acceptable to institutional investors and ultimately society at large.”
Pete Cherecwich, President, Corporate & Institutional Services, Northern Trust said: “Since the announcement of the launch of Zodia Custody in December 2020, we have seen significant market interest in these new capabilities.
“The FCA registration, alongside the successful operational testing with pilot clients, marks a significant milestone. We are pleased that Zodia’s robust capabilities now make it possible to support the growing number of institutional asset owners, family offices and asset managers around the world investing in this emerging asset class.”
The experience with Zodia Custody is contributing to Standard Chartered and Northern Trust’s position as leaders in the development of digital asset infrastructure.
Standard Chartered has recently invested in core technology provider Metaco and is collaborating with the Bank of Thailand and the Hong Kong Monetary Authority to explore distributed ledger interoperability for cross-border fund transfers.
In June, the bank announced a partnership with BC Group to establish a digital asset brokerage and exchange platform for institutional and corporate clients in the UK and Europe.
Northern Trust has launched the industry’s first deployment of blockchain technology for the private equity market in 2017 and it continues to develop and implement additional capabilities on its blockchain. The bank has recently collaborated with Broadridge to make the technology available to all market participants.
In 2020, Northern Trust and BondEvalue partnered to complete the first trade of a fractionalized blockchain-based bond, working in cooperation with the Monetary Authority of Singapore.