{"id":403950,"date":"2023-06-01T16:12:20","date_gmt":"2023-06-01T16:12:20","guid":{"rendered":"https:\/\/insidebitcoins.com\/?p=403950"},"modified":"2023-06-01T16:12:20","modified_gmt":"2023-06-01T16:12:20","slug":"investment-bank-cowen-shocks-crypto-industry-with-abrupt-shutdown-of-digital-asset-unit-what-went-wrong","status":"publish","type":"post","link":"https:\/\/insidebitcoins.com\/news\/investment-bank-cowen-shocks-crypto-industry-with-abrupt-shutdown-of-digital-asset-unit-what-went-wrong","title":{"rendered":"Investment Bank Cowen Shocks Crypto Industry with Abrupt Shutdown of Digital Asset Unit – What Went Wrong?"},"content":{"rendered":"

Investment Bank Cowen’s latest move has sent a shock wave across the crypto industry. <\/span>The bank announced that it is shutting down its digital asset unit, Cowen Digital, which allows institutional clients to access crypto trading.<\/span><\/p>\n

According to a Bloomberg <\/span>report<\/span><\/a>, 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. <\/span><\/p>\n

Cowen Drops Crypto Following Major Acquisition<\/b><\/h2>\n

Cowen Inc. is a financial services firm that provides investment banking services, research, sales and trading services, and more. <\/span><\/p>\n

The Cowen Digital started its digital asset division over a year ago. The aim was to offer digital asset trading services to institutional investors. <\/span><\/p>\n

The firm planned to allow customers to trade 16 crypto assets, including Bitcoin<\/a>, Ethereum<\/a>, and Solana<\/a>. <\/span><\/p>\n

However, in March 2023, one of North America’s largest banks, TD Bank Group, <\/span>acquired<\/span><\/a> Cowen. <\/span>Cowen’s team hinted that they may still offer cryptocurrency trading services, but not under TD Bank’s umbrella.<\/span><\/p>\n

The bank noted in the email to investors:<\/span><\/p>\n

“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.”<\/span><\/p><\/blockquote>\n

Firms Pull Plug On Crypto<\/b><\/h2>\n

The crypto regulatory uncertainty in the United States and the prolonged crypto winter have frustrated many firms. <\/span><\/p>\n

Cowen Digital’s shutdown adds to the growing list of US-based financial institutions pulling away from crypto. <\/span><\/p>\n

In a May 25 <\/span>report<\/span><\/a>, Digital Currency Group (DCG) announced that it would shut down TradeBlock, its trade execution, and its prime brokerage unit, effective May 31. <\/span><\/p>\n

The firm cited the prolonged crypto winter and bearish economy, alongside the US’ harsh regulatory environment, as the reason for its decision.<\/span><\/p>\n

Also, on May 10, two leading global market makers, Jane Street and Jump Crypto, <\/span>surrendered<\/span><\/a> their US crypto trading plans amid regulatory uncertainty. <\/span><\/p>\n

Jane Street Group said the cloudy regulatory atmosphere in the US constituted a roadblock to its business operations, preventing it from meeting internal standards. <\/span><\/p>\n

Jump Trading also pulled back from the US market for the same reason.<\/span><\/p>\n

Other top industry players like <\/span>Coinbase<\/span><\/a>, Gemini, and Galaxy Digital have initiated moves outside the US. <\/span><\/p>\n

The Coinbase CEO <\/span>cited<\/span><\/a> the US regulatory atmosphere as why it is making the moves. Also, a fintech firm in a legal battle with the US SEC, Ripple, <\/span>hinted<\/span><\/a> at abroad expansion plans.<\/span><\/p>\n

Given the heightened anti-crypto actions by the US government and regulators, more firms may likely follow.<\/span><\/p>\n

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.<\/span><\/p>\n

 <\/p>\n

\n
\n
\n
\n
\n

Most Searched Crypto Launch - Pepe Unchained<\/p>\n <\/div>\n

\n
\n
\n

Rating<\/p>\n

\n
<\/div>\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n
\n \n
\n \"Pepe\n <\/div>\n\n
\n