Join Our Telegram channel to stay up to date on breaking news coverage
Investment Bank Cowen’s latest move has sent a shock wave across the crypto industry. The bank announced that it is shutting down its digital asset unit, Cowen Digital, which allows institutional clients to access crypto trading.
According to a Bloomberg report, Cowen Digital noted in a note to investors that its team would cease operation on May 31. It had about ten employees and an intern on the unit’s team.
Cowen Drops Crypto Following Major Acquisition
Cowen Inc. is a financial services firm that provides investment banking services, research, sales and trading services, and more.
The Cowen Digital started its digital asset division over a year ago. The aim was to offer digital asset trading services to institutional investors.
The firm planned to allow customers to trade 16 crypto assets, including Bitcoin, Ethereum, and Solana.
However, in March 2023, one of North America’s largest banks, TD Bank Group, acquired Cowen. Cowen’s team hinted that they may still offer cryptocurrency trading services, but not under TD Bank’s umbrella.
The bank noted in the email to investors:
“Our entire team believes strongly in need for trusted counterparties who understand the needs of institutional investors […]We will continue to try and fulfill that endeavor, but will have to do so in a different home.”
Firms Pull Plug On Crypto
The crypto regulatory uncertainty in the United States and the prolonged crypto winter have frustrated many firms.
Cowen Digital’s shutdown adds to the growing list of US-based financial institutions pulling away from crypto.
In a May 25 report, Digital Currency Group (DCG) announced that it would shut down TradeBlock, its trade execution, and its prime brokerage unit, effective May 31.
The firm cited the prolonged crypto winter and bearish economy, alongside the US’ harsh regulatory environment, as the reason for its decision.
Also, on May 10, two leading global market makers, Jane Street and Jump Crypto, surrendered their US crypto trading plans amid regulatory uncertainty.
Jane Street Group said the cloudy regulatory atmosphere in the US constituted a roadblock to its business operations, preventing it from meeting internal standards.
Jump Trading also pulled back from the US market for the same reason.
Other top industry players like Coinbase, Gemini, and Galaxy Digital have initiated moves outside the US.
The Coinbase CEO cited the US regulatory atmosphere as why it is making the moves. Also, a fintech firm in a legal battle with the US SEC, Ripple, hinted at abroad expansion plans.
Given the heightened anti-crypto actions by the US government and regulators, more firms may likely follow.
Top industry figures, including Coinbase CEO Armstrong, have emphasized the need for clear regulations. The framework in the US to mitigate the risk of losing innovation to other jurisdictions.
Most Searched Crypto Launch - Pepe Unchained
- Layer 2 Meme Coin Ecosystem
- Featured in Cointelegraph
- SolidProof & Coinsult Audited
- Staking Rewards - pepeunchained.com
- $10+ Million Raised at ICO - Ends Soon
Join Our Telegram channel to stay up to date on breaking news coverage
