US-Based Investment Bank Cowen Launches Crypto Division

Cowen, an independent investment bank in the US, has officially created a cryptocurrency and digital asset section as it seeks to lead US-based banks in the growing segment. Named Cowen Digital, the unit will offer cryptocurrency trading for institutional investors, as well as custody solutions via Cowen's partnership with Standard Custody and Trust Company, a cold storage-focussed subsidiary of PolySign. Cowen stated in an announcement that although the new division has just been announced the bank has been trading crypto on behalf of clients for several months.

The new arm of Cowen will give institutional clients “secure and compliant access to the digital asset ecosystem,” the bank said. In the future, this is expected to include derivatives and futures, financing solutions, as well as access to non-fungible tokens (NFTs) and the wider decentralised finance (DeFi) space.

“Through Cowen Digital, our clients now have access to the crypto and digital asset markets with our institutional quality and fully integrated end-to-end execution and custody capabilities,” Cowen CEO Jeffrey M. Solomon said in a statement.

Cowen reported having $15.8 billion (roughly Rs. 1,20,380 crore) in assets under management, as of December 31. Drew Forman, who has worked as a managing director and head of equity derivatives for the company, will lead Cowen Digital.

Cowen's move comes as Wall Street increasingly looks to capitalise on the rapidly-evolving space of digital assets like Bitcoin and Ether, which have surged in popularity and value in recent years, helped along by retail investor interest.

"We have a big first-mover advantage in this space," Cowen co-president Dan Charney told Bloomberg. "Because of our culture, we're able to work with our legal and compliance and our regulators in a way that maybe our bigger competitors aren't, and we're just able to get to solutions faster."

Earlier this week, Goldman Sachs executed the first over-the-counter crypto transaction by a major US bank, working with crypto financial services provider Galaxy Digital to trade a Bitcoin option.