Standard Chartered signs deal to buy Zodia Custody

Standard Chartered has signed definitive agreements to buy Zodia Custody, a crypto custodian that holds digital assets for institutions, the bank said in its 21 October announcement. The deal would bring Zodia’s regulated custody business into the bank’s Securities Services unit, subject to regulatory approval and other closing conditions.

Standard Chartered I H Limited would acquire all of Zodia Custody Limited, the parent of regulated businesses in Singapore, Hong Kong, Australia, the United Arab Emirates and Luxembourg. The bank said the move would consolidate its digital asset custody operations and support a combined offer for traditional and digital asset securities.

What exactly is Standard Chartered buying?

The bank is buying 100% of Zodia Custody Limited, according to the announcement. After completion, Zodia’s regulated custody business will join Standard Chartered’s existing digital asset custody activities within Securities Services.

The Block reported that financial terms were not disclosed. The agreement follows Standard Chartered’s non-binding offer, accepted by Zodia’s shareholders and noteholders in May. Signing definitive agreements moves the deal beyond that earlier offer, but it does not mean the acquisition has closed.

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, Standard Chartered’s venture arm. Zodia Solutions will continue providing infrastructure to financial institutions, including Standard Chartered.

The bank named seven investors backing the new company: NAB Ventures, Northern Trust, SBI Ventures, Further Ventures, Emirates NBD, Zodia Investments (Investcorp) and Zodia Holdings, which is owned by SC Ventures. The announcement did not say how much each investor would contribute or when Zodia Solutions would be established.

When could the acquisition close?

The deal needs regulatory approvals and must meet customary closing conditions, but the announcement gave no expected completion date. The Block also reported that no purchase price was disclosed.

Standard Chartered said it expects no disruption for clients during the transaction and that existing Zodia custody clients will continue to be serviced as usual. The bank did not name the regulators that must approve the deal.

References

• 21 October announcement — sc.com
• reported that financial terms were not disclosed — theblock.co