Standard Chartered-Backed Zodia Markets to Buy Elwood Trading Desk

As an experienced financial analyst with a background in the crypto market, I find the recent news of Elwood Technologies selling its over-the-counter (OTC) trading division to Zodia Markets quite intriguing. This move underscores the growing confidence and maturity of institutional players within the crypto space.

According to reports, Zodia Markets, a cryptocurrency trading firm with backing from Standard Chartered’s venture arm, has announced its acquisition of Elwood Technologies’ over-the-counter trading division. This confirmation follows speculation that the unit was for sale and negotiations were underway.

Following the sale of their business, Elwood – backed by cryptocurrency magnate Alan Howard – will now dedicate their efforts to developing and providing their trading technology software-as-a-service (SaaS) offerings and solutions. (Elwood announced this shift on Monday.)

In the regulated crypto sector, confidence is surging. Established initiatives, supported by banks, are emerging, accompanied by trusted custodians. They’re constructing a robust framework for trading activities, designed to cater to the needs of conventional financial markets.

According to CEO Usman Ahmad of Zodia Markets, their over-the-counter (OTC) business currently processes trading volumes amounting to approximately $60 million per day. Regarding potential customer volume from the recent deal, Ahmad was tight-lipped and only mentioned via email that they anticipate a substantial increase in daily volumes. Financial details of the agreement were not disclosed.

Standard Chartered, as indicated in recent news, is supporting two companies, Zodia Markets and Zodia Custody, through its SC Ventures business arm in their crypto spot trading and custody operations respectively.

Usman stated that the deal would not interfere with Standard Chartered’s plans to trade cryptocurrencies. He explained, “This transaction facilitates Zodia Markets’ expansion and does not clash with Standard Chartered’s potential crypto trading activities.”

The cryptocurrency markets, having emerged from a prolonged slump, continue to exhibit volatility. Elwood’s CEO, Chris Lawn, stated that the choice to offload their OTC (Over-the-Counter) business wasn’t driven by bullish or bearish market conditions, but rather symbolizes the evolving nature of the digital asset sector. With an increasing number of new players entering the fray, there’s a growing demand for sophisticated SaaS (Software as a Service) offerings catering to institutional needs.

“Due to heightened competition and mergers and acquisitions, companies will need to confront difficult questions about their identity. Our response is that we define ourselves as a technology company, leading us to dedicate all resources to this sector and divest from our Over-the-Counter business.”