Standard Chartered’s SC Ventures owned just under 70% of the shares of digital asset custody firm Zodia Custody and has announced it has agreed to buy out the minority shareholders and noteholders, subject to regulatory approval. The investors include co-founder Northern Trust, alongside Japan’s SBI, National Australia Bank and Emirates NBD.
We previously explored the rationale for the buyout, given that the parent, Standard Chartered, now offers digital asset custody directly. Not only does the bank compete with its subsidiary for clients, but there are duplicative licensing efforts across the world. Beyond the operational overlap, some banks may also have been reluctant to use a custodian majority owned by a competitor.
Today’s announcement states that a new company, Zodia Solutions, will provide digital asset technology services to Standard Chartered, the shareholder banks and others. The Solutions entity will be set up independently under SC Ventures and backed by “a number of bank investors, including existing Zodia Custody investors.” That structure addresses the competitive conflict as the regulated digital asset custody services will be rolled into Standard Chartered’s Financing and Securities Services division.
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