Coinbase has acquired One River Digital Asset Management (ORDAM), a leading institutional digital asset manager and SEC-registered investment advisor.
ORDAM will transition to become Coinbase Asset Management (CBAM) and will operate as an independent company and wholly owned subsidiary of Coinbase. The acquisition is in line with the exchange’s long-term strategy to unlock additional opportunities for institutions to participate in the crypto-economy.
Summary
Why did Coinbase acquire ORDAM?
With over $130 billion in quarterly institutional trading volume and over $50 billion in institutional assets on the platform, Coinbase operates at the center of the institutional digital asset market.
Their products are specifically designed to provide secure access to digital and Web3 assets. Leading global institutions including asset managers, corporations, financial institutions, and other market participants trust Coinbase as their crypto platform of choice.
From the fourth quarter of 2022, about 25% of the world’s top 100 hedge funds by declared assets under management have chosen to join Coinbase. To further their goal of bridging the gap between institutions and the crypto-economy, announced the acquisition of One River Digital Asset Management, a subsidiary of One River Asset Management.
A SEC-registered investment advisor, ORDAM will form the foundation of Coinbase Asset Management and offer investment advisory services to a range of new and existing institutional clients.
ORDAM is a leading digital asset manager focused on providing institutional clients with exposure to digital assets through robust investment products. Coinbase and ORDAM have a history of close collaboration.
In fact, ORDAM leverages Coinbase Prime to provide differentiated investment solutions to sophisticated institutions and is collaborating to create an innovative digital asset management infrastructure like ONE Digital SMA.
That is, a suite of digital investment strategies and indices in a user-friendly separately managed account (SMA) based on Coinbase Prime and Coinbase Custody, a New York-based DFS-qualified custodian. Coinbase Ventures was also one of the first investors in ORDAM.
The goals in common with ORDAM
Coinbase and ORDAM share an ethos based on prudent risk management, a trait that has enabled both companies to successfully weather recent market turbulence.
Culturally, the two organizations are strongly aligned in pursuing the opportunity of digital assets with an uncompromising priority on safety and soundness.
With this acquisition, Coinbase welcomes ORDAM’s best-in-class team with whom it will work more deeply to expand institutional access to digital assets
Eric Peters will continue to serve as CEO/CIO of ORDAM (now CBAM), as well as CEO/CIO of One River Asset Management, an unaffiliated and independent company.
Eric has over thirty years of experience in the asset management industry and founded One River Asset Management in 2013. ORDAM will continue to operate as an independent entity under Coinbase, separate from trading and exchange activities, with minimal disruption to current trading activities and standard controls implemented between well-regulated and diversified financial institutions.
Coinbase cuts ties with Silvergate: what happened?
On 2 March Silvergate Bank, the popular fintech bank, lost five partners due to a series of investigations and lawsuits against it.
Coinbase, Paxos, Gemini, BitStamp and Galaxy Digital were some of the most prominent cryptocurrency companies that used Silvergate as a banking partner.
However, Coinbase’s ending of the service also forced a crypto hedge fund to look for a new financial partner.
Today, Digital Asset Capital Management (DACM), a crypto hedge fund with assets of more than $400 million, announced that it is looking for a new banking partner in Switzerland after the Silvergate chaos.
DACM used Silvergate’s real-time network to move funds to and from Coinbase Global Inc.’s platform.
In an interview with Bloomberg, the head of DACM said that although there are some banks in the United States that can handle cryptocurrency transactions, they are not as crypto-focused as Silvergate.
He also added that the search for a new partner may take some time and that they are talking to some Swiss banks. Switzerland was one of the first countries to regulate and offer banking licenses to cryptocurrency banks.
SEBA Bank AG (formerly SEBA Crypto AG) is a fully regulated institution, having received its banking and securities dealer license from the Swiss Financial Market Supervisory Authority (FINMA) in August 2019.
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