Banking Giant's Crypto Arm Snaps Up OTC Trading Powerhouse

Standard Chartered-backed Zodia Markets has agreed to acquire Elwood Capital Management Ltd (ECML), the digital asset over-the-counter (OTC) trading business of Elwood Technologies, in a deal announced today (Wednesday). The acquisition, set to be completed by August, will expand Zodia Markets' regulated presence and enhance its services to institutional clients worldwide.

Zodia Markets Acquires Elwood's OTC Trading Business

Elwood Technologies, a provider of digital asset execution and portfolio management software, is divesting its OTC trading arm to focus on its core software-as-a-service (SaaS) offerings. The sale aligns with Elwood's plan to develop its execution management system (EMS) and portfolio management system (PMS) for institutional clients.

Today's announcement confirms last week's reports that Zodia Markets is preparing for an acquisition, as reported by Bloomberg.

“This sale marks an important new chapter for Elwood and strengthens our position as a leading provider of execution and portfolio management software for global institutions that trade and manage digital assets,” said Chris Lawn, CEO of Elwood. “The sale of our OTC trading business supports Elwood’s strategic plan to build a world-class end-to-end EMS and PMS software platform and allows us to fully dedicate our resources to the SaaS business.”

Zodia Markets is pleased to announce that it has agreed to acquire Elwood Capital Management Ltd, Elwood’s Digital Asset OTC trading business based in Jersey and regulated by the Jersey Financial Services Commission. 🔗https://t.co/IQN8WMf8AL #ZodiaMarkets #OTC #DigitalAssets pic.twitter.com/mejcEL5IvW

For Zodia Markets, the acquisition represents a next step in its expansion strategy. The deal will provide the company with licenses for virtual asset service provider services and investment businesses in Jersey, enhancing its ability to offer OTC settlement services.

The transaction comes as Standard Chartered, Zodia Markets' parent company, is reportedly exploring the establishment of its own trading desk for Bitcoin and Ethereum. This move could position Standard Chartered as one of the first global financial institutions to engage directly in cryptocurrency spot trading.

“This acquisition is a significant progression to create greater diversification in our service offering and footprint, enabling scale and accelerating product capability,” commented Usman Ahmad, Co-Founder and CEO of Zodia Markets. “Building on our exceptional growth in the first half of the year, we are well-positioned to further capitalize on the global institutional demand for digital asset solutions.”

Following the completion of the transaction, ECML will be rebranded as Zodia Markets Jersey Ltd. The deal is expected to boost Zodia Markets' daily OTC trading volumes, which currently range from $50 million to $60 million.

A few months ago, Zodia Markets also partnered with Fireblocks, an enterprise platform specializing in digital asset operations and blockchain-based innovation. The strategic collaboration, announced today (Thursday), aims to tackle existing challenges in the correspondent banking landscape while enhancing operational efficiency through the utilization of digital assets.

Regarding Standard Chartered, the bank announced its latest collaboration two months ago, forming an agreement with Clearstream to enable users to access funds domiciled in the United Arab Emirates (UAE). This collaboration aims to enhance fund processing and execution. It also aligns with recent regulatory changes from the Securities and Commodity Authority of the UAE.