Key Takeaways
- • Coinbase (COIN) has acquired One River Digital Asset Management, an SEC-registered institutional digital-asset manager, with terms of the deal not disclosed, according to a Coinbase blog post published Friday.
- • The acquired entity will be renamed Coinbase Asset Management and will form the foundation of Coinbase's investment advisory service for institutional clients.
- • Eric Peters, CEO and CIO of One River Asset Management, will lead Coinbase Asset Management, which will operate as an independent unit.
- • The move is part of Coinbase's broader push beyond its retail trading business as transaction volumes have declined in recent months.
- • Coinbase's institutional products have drawn regulatory scrutiny in the wake of the FTX collapse.
Summary
Cryptocurrency exchange Coinbase (COIN) said it bought One River Digital Asset Management, an institutional digital-asset manager, as it seeks to expand beyond its core business serving retail customers. In a blog post published on Friday, the exchange said One River Digital, a U.S. Securities and Exchange Commission-registered subsidiary of One River Asset Management, will become Coinbase Asset Management. The unit will "form the foundation" of Coinbase's investment advisory service for institutional clients. Terms of the deal were not disclosed.
The acquisition comes as Coinbase looks to diversify away from retail trading, which has seen a drop-off in transaction volume in recent months. Institutional investment management is one part of that strategy, alongside the company's move into developer infrastructure through its new layer 2 blockchain, Base, whose test network was released the prior week. Greg Tusar, Coinbase's head of institutional product, told Bloomberg: "This is about wanting to bring more institutional capital into the world of crypto." He added, "We expect to build – on the other side of this crypto winter – an awesome asset-management business."
Coinbase Asset Management will operate as an independent unit and will be led by Eric Peters, who serves as CEO and Chief Investment Officer of One River Asset Management and will hold the same roles at the new entity. The deal builds on a relationship between the two firms: in February of the prior year, Coinbase and One River Digital teamed up to offer One River's separately managed accounts to Coinbase Prime users, allowing clients to hold their assets directly while drawing on an external manager's expertise.
The transaction also takes place against heightened regulatory attention on the crypto sector following the collapse of the FTX exchange. Some of Coinbase's institutional products have come under scrutiny from regulators examining the industry more closely.
The acquisition comes as Coinbase looks to diversify away from retail trading, which has seen a drop-off in transaction volume in recent months. Institutional investment management is one part of that strategy, alongside the company's move into developer infrastructure through its new layer 2 blockchain, Base, whose test network was released the prior week. Greg Tusar, Coinbase's head of institutional product, told Bloomberg: "This is about wanting to bring more institutional capital into the world of crypto." He added, "We expect to build – on the other side of this crypto winter – an awesome asset-management business."
Coinbase Asset Management will operate as an independent unit and will be led by Eric Peters, who serves as CEO and Chief Investment Officer of One River Asset Management and will hold the same roles at the new entity. The deal builds on a relationship between the two firms: in February of the prior year, Coinbase and One River Digital teamed up to offer One River's separately managed accounts to Coinbase Prime users, allowing clients to hold their assets directly while drawing on an external manager's expertise.
The transaction also takes place against heightened regulatory attention on the crypto sector following the collapse of the FTX exchange. Some of Coinbase's institutional products have come under scrutiny from regulators examining the industry more closely.
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