Zodia Custody, the digital-asset custody arm backed by Standard Chartered, has officially ended its joint venture in Japan with SBI Holdings. The decision will dissolve SBI Zodia Custody roughly two years after the partnership was launched, a Bloomberg report cited.
Why the pull-out?
The termination of the JV came after both parties reassessed their priorities. Zodia’s CEO, Julian Sawyer, explained that the move reflects a “strategic alignment between SBI and ourselves as a mutual decision that we have other priorities and they have other priorities.”
In the past, there were discussions involving SBI Zodia Custody and the Japanese regulator, the Financial Services Agency (FSA), about obtaining the necessary local registration to operate fully as a crypto-custodian under Japanese law. However, with no breakthrough and presumably other regulatory burdens, this JV made all the efforts unviable.
“Other priorities” for both companies could range from shifting market conditions, changing regulatory risk, the cost of compliance in Japan, or moves to focus resources elsewhere.
Origin & intent of the JV
The partnership between the two entities was hailed by crypto proponents when it was formalized in early 2023. A press release dated February 2, 2023, announced the establishment of the JV: total ownership split 51% to SBI Digital Asset Holdings, 49% to Zodia Custody.
The goal was to create a “Tier-1 crypto asset custodian in Japan,” targeting institutional clients, bringing together SBI’s local presence and Zodia’s international crypto custody expertise. The JV was subject to regulatory approvals and foreign investment/antitrust clearances. Part of the delay or complexity may have been in those regulatory processes.
The move will have implications for investors and clients, who will be closely watching out for how both firms redeploy their efforts and whether either tries again later under different terms.