A Bloomberg report announced that American investment bank TD Cowen has shut down its crypto asset unit. According to the report, Cowen Digital will pack until June 1st, which will be the last day for his team. There is no explanation for the action, which comes just a year after it was introduced by the bank.
We will not abandon digital assets even after the closure; Cowen Digital
Even though Cowen Digital has closed its doors, the team has reiterated its commitment to crypto services and has not given up on giving up digital assets. However, you could switch to another organization.
In an email reported by Bloomberg, the team wrote:
“Our entire team strongly believes that we need trusted counterparties that understand the needs of institutional investors – through premium high and low touch execution, in-depth knowledge-based content, corporate access and group building events. We will continue to try to achieve this goal, but we will have to do it in a different home.”
In March 2022, investment bank Cowen launched Digital and expanded its services into virtual assets.
The goal of the platform was to ensure that institutional clients could seamlessly access the crypto market and interact with 16+ crypto tokens such as Bitcoin, Ethereum, etc. The bank also mentioned its expansion plans by incorporating crypto futures, derivatives and decentralized finance (DeFi) during the period.
Cowen Bank was acquired by TD Bank Group in August 2022 for $1.3 billion in a deal completed in March of this year. In December, the company recruited hired a few executives to handle European operations and assembled a 10-strong team.
However, it is still uncertain whether the acquisition agreement will target the operation of a crypto business and result in the immediate shutdown of Cowen Digital.
Issues in the crypto market impacting institutional businesses
The recent downtrend in most crypto assets has weighed on the crypto industry. In particular, the ongoing litigation has fueled the fire that began to burn in 2022, when some large digital asset-related companies collapsed.
The total market cap is shown in the chart l Source: TradingView.com
The banking crisis and the current US economic situation with regard to debt defaults have not exactly improved the situation either. As a result, several companies are struggling with insolvency issues.
On May 25, Bloomberg reported that the Digital Currency Group (DCG), a venture capital group, is closing its brokerage subsidiary TradeBlock effective May 31.
The company emphasized that the reasons for the closure are the strict regulatory policies of the US and the unfavorable market conditions for digital assets.
Meanwhile, most major digital assets are trading in the red at the time of writing. The accumulated Crypto Market Cap hovers at $1.13 trillion after plummeting 0.28% over the past 24 hours.
Featured image from Pixabay and chart from TradingView
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