Due to the increasingly unfriendly business environment in the United States, another financial institution has changed its mind about cryptocurrency.
The cryptocurrency asset division of the American boutique investment bank Cowen Inc. is shutting down. In light of an unclear regulatory environment, it has become the most recent financial institution to refrain from digital assets.
The bank announced that “Today will be the last day for the team here at Cowen Digital,” according to a May 31 article by Bloomberg.
Cowen Financial Services was taken over by TD Bank Group, one of the biggest banks in North America, in March.
Bank Interest In Cryptocurrency Is Declining
To allow institutional clients to invest in 16 crypto assets, Cowen’s digital asset unit was established just over a year ago.
The Cowen team made a hint that they would still provide crypto services, just not under the TD Bank brand. Investors were informed by email that:
“Every member of our team firmly believes in the necessity for dependable counterparties who are aware of institutional investors’ needs […] Although we will need to do it in a different region, we will continue to try to accomplish that goal.
Adding to the growing list of American financial institutions turning away from Cryptocurrency and its contemporaries is Cowen Digital’s closing.
Other Entities That Have Left Crypto Space
Digital Currency Group (DCG) shut down its prime brokerage business TradeBlock, according to a report from the end of May. The company cited the “state of the broader economy and prolonged crypto winter, along with the challenging regulatory environment for digital assets in the U.S.” as reasons for the choice.
Two of the biggest market-making companies in the world also cancelled plans to trade cryptocurrencies.
According to Jane Street Group, uncertain regulatory waters “made it difficult for the firm to operate the business in a way that meets internal standards.” Jump Trading echoed the notion and announced that it would be moving away from U.S. markets in preference for cryptocurrency trading.
Larger participants in the cryptocurrency market like Coinbase, Gemini, and Galaxy Digital have already expanded internationally while keeping a presence domestically. As Uncle Sam’s war on crypto escalates, it’s probable that many more will follow.