Today independent investment bank Cowen announced its subsidiary Cowen Digital Asset Investment Company plans to enable clients to invest in cryptocurrencies and digital assets. To achieve that aim, it invested $25 million in institutional digital asset custody firm PolySign, leading its $53 million Series B financing. Two Cowen executives will join the PolySign board.
Other investors include Blockchain.com, Race Capital, Sandia Holdings and PilotRock Investments.
“As digital assets continue to grow and mature as an asset class, institutional investors need trusted custody and trading solutions on par with their requirements for investing in traditional securities,” said Jeffrey M. Solomon, Chair and CEO of Cowen.
“Through investing in and working closely with PolySign, Blockchain.com will offer more mission critical infrastructure products and services to our customers,” said Xen Baynham-Herd, head of asset management at Blockchain.com.
PolySign’s founder and President Arthur Britto previously co-founded Ripple and Ripple’s CTO David Schwartz is an adviser. Together they designed Polysign’s proprietary blockchain technology to secure digital assets.
The companies say they plan to work together to work on a comprehensive digital asset solution for institutional clients encompassing a ‘wide array’ of digital assets. There are plans to explore integrating Polysign’s digital banking technology into Cowen’s sales and trading platform.
PolySign’s subsidiary Standard Custody recently received a trust company charter from the New York State Department of Financial Services (NYDFS).
When the charter was announced last week, Standard Custody’s and PoylSign’s CEO Jack McDonald said, “Standard Custody is the only custodian to utilize third-party transaction verification and build its platform on a combination of ‘smart’ hardware security modules and novel blockchain technology resulting in a revolutionary ‘better than cold storage’ institutional custody solution.”
Meanwhile, institutional digital asset custody firms have been on the receiving end of significant investment and, in some cases, acquired. Last week, Galaxy Digital acquired BitGo for $1.2 billion. In March, PayPal acquired Curv for around $200 million. The world’s largest global custodian, BNY Mellon, chose Fireblocks as its technology partner and participated in its $133 million Series C funding in March.