Standard Chartered agrees to buy 100% of Zodia Custody

100%: Standard Chartered has signed definitive agreements to acquire all of Zodia Custody Limited, bringing the crypto custodian’s regulated operations into the bank’s Securities Services business. The deal remains subject to regulatory approvals and customary closing conditions.

The acquisition would put Zodia’s regulated custody operations inside a global bank while leaving its software business to serve financial institutions separately.

The bank announced the agreements on Oct. 21, following acceptance of its earlier non-binding offer. The Standard Chartered announcement says the acquired company is the parent of Zodia Custody’s regulated entities in Singapore, Hong Kong, Australia, the United Arab Emirates and Luxembourg.

What parts of Zodia will Standard Chartered acquire?

Standard Chartered I H Limited will acquire Zodia Custody Limited, and after completion the custody business will be integrated into the bank’s existing digital asset custody activities within Securities Services. Financial terms were not disclosed, according to The Block’s report on the deal.

The companies have said there is no expected disruption to clients during the transaction. Zodia’s existing custody clients will continue to be serviced as usual, Standard Chartered said.

What happens to Zodia’s software business?

Zodia will separate its digital asset software and professional services business and transfer the related assets to Zodia Solutions, an independent entity to be established under SC Ventures. The new company will provide infrastructure to financial institutions launching or expanding digital asset services, including Standard Chartered.

Standard Chartered’s announcement names NAB Ventures, Northern Trust, SBI Ventures, Further Ventures, Emirates NBD, Investcorp and SC Ventures among the bank investors supporting Zodia Solutions. The custody acquisition and the software separation therefore have different paths: the regulated custody operations are slated to join the bank, while the infrastructure business is set to operate independently.

What still needs to happen before the deal closes?

Regulatory approvals and customary closing conditions must be met before the acquisition is completed. Until then, the agreements set out the planned transaction but do not transfer ownership.

The deal follows Standard Chartered’s earlier non-binding offer, accepted in May, according to The Block. For institutional clients, the stated aim is to bring traditional and digital asset securities services together in one offering; the bank says the acquisition will deepen its digital asset custody capabilities.

References

• Standard Chartered announcement — sc.com
• The Block’s report on the deal — theblock.co