Cowen, the boutique investment bank acquired this year by TD, has shut down its crypto arm, Cowen Digital, according to emails seen Wednesday by Bloomberg.
Cowen Digital launched in March 2022 to provide institutional clients with access to the crypto market. At the time, Dan Charney, Cowen’s co-president, said Cowen Digital had been trading crypto on behalf of clients for several months.
The firm teased at the time that it would eventually offer services around derivatives and futures, financing solutions, decentralized finance and NFT access.
However, an internal email reported by Bloomberg on Wednesday read: “Today will be the last day for the team here at Cowen Digital.” The email was addressed to “clients, friends and colleagues,” and listed at least 10 employees and an intern affected by the decision.
A Cowen spokesperson declined to comment to Bloomberg. A TD spokesperson didn’t return a request for comment from Banking Dive.
Cowen Digital’s URL leads to a 404 Error page as of Thursday morning.
A carrot at the end of the email may leave the door open for Cowen Digital to continue its operations at a separate organization.
“Our entire team believes strongly in the need for trusted counterparties who understand the needs of institutional investors — through white-glove high and low touch execution, deep knowledge-driven content, corporate access and group educational events,” the email said. “We will continue to try and fulfill that endeavor, but will have to do so in a different home.”
The crypto market was in a different place when Cowen Digital launched. Banks big and small were staking their claim in the space; and while Bitcoin’s price was down from its November 2021 high, the market in March 2022 hadn’t yet been shaken by the collapse of the Terra/Luna ecosystem or exchanges like Celsius and FTX.
This year, banks including Metropolitan Commercial Bank and Farmington State Bank have backed away from crypto.
Crypto prices, meanwhile, have been trending upward since Bitcoin’s drop below $16,000 in November. And increased regulatory scrutiny has given traditional banks and crypto firms pause.
Cowen Digital’s closure follows the shuttering of another institutional crypto unit this week.
Digital Currency Group, a venture capital firm, began the wind-down of its trade execution and prime brokerage subsidiary TradeBlock on Wednesday. A TradeBlock spokesperson attributed the closure, originally reported by Bloomberg, to “the state of the broader economy and prolonged crypto winter, along with the challenging regulatory environment for digital assets in the US.”
