The American boutique investment bank Cowen Inc. is closing its crypto asset unit. It has become the latest financial institution to shy away from digital assets amid a darkening regulatory environment.
“Today will be the last day for the team here at Cowen Digital,” the bank stated, according to a May 31 report by Bloomberg.
In March, financial services firm Cowen was acquired by TD Bank Group, one of the largest banks in North America.
Cowen’s digital asset unit was started just over a year ago to enable institutional clients to invest in 16 crypto assets.
The Cowen team hinted that they may still offer crypto services but not under the umbrella of TD Bank. The email to investors stated:
“Our entire team believes strongly in the 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,”
The Cowen Digital closure adds to a growing list of American financial firms backing away from Bitcoin and its brethren.
In late May, it was reported that Digital Currency Group (DCG) announced the closure of its prime brokerage subsidiary TradeBlock. The firm blamed the “state of the broader economy and prolonged crypto winter, along with the challenging regulatory environment for digital assets in the U.S.” for the decision.
On May 10, CryptoPotato reported that two of the world’s leading market-making firms also pulled the plug on their crypto trading plans.
Jane Street Group said murky regulatory waters “made it difficult for the firm to operate the business in a way that meets internal standards.” Meanwhile, Jump Trading echoed the sentiment stating it was ditching U.S. markets for crypto trading.
Several larger players in the crypto industry, including Coinbase, Gemini, and Galaxy Digital, have already made moves overseas while maintaining a presence in the U.S. It is likely that a lot more will follow as Uncle Sam’s war on crypto escalates.