Sebastian Sinclair

<div id="highlights-block_62c51bb914107" class="highlights">
 <ul>
 <li>Purchase of Napoleon Asset Management could also help CoinShares expand product range</li>
 <li>&#8220;Our regulated status in a growing number of jurisdictions is one of CoinShares’ principal strengths,&#8221; CEO said</li>
 </ul>
 
</div>



Digital asset investment firm CoinShares said Monday it has wrapped up its acquisition of an EU-regulated crypto company, opening the door for the firm to market its products and services across the region.



Following receipt of approval from French financial regulator <a href="https://www.amf-france.org/en" target="_blank" rel="noreferrer noopener">AMF</a> on Sunday, CoinShares has picked up Napoleon Asset Management, one of the EU&#8217;s first digital asset managers regulated under the bloc&#8217;s Alternative Investment Fund Managers Directive (AIFM).



The acquisition bolsters <a href="https://cms.blockworks.co/tag/coinshares/" target="_blank" rel="noreferrer noopener">CoinShares</a>&#8216; offerings by leveraging algorithmic trading investment strategies and artificial intelligence developed by Napoleon, the firm said in a statement. The move also allows CoinShares to pursue its ambition to become a full-service digital asset investment and trading group, operating within a strong regulatory framework, it said.



As a licensed company under AIFM regulation, Napoleon is authorized to conduct business in other EU member states through what is known as &#8220;passporting.&#8221; 



Once regulated by EU member states, passporting allows a firm registered in the&nbsp;European Economic Area to operate in another state without the need for further authorization from national regulators.



The deal concludes nearly seven months of consultation with the regulator following Jersey-based CoinShares&#8217; acquisition of Napoleon in December. On Nov. 30 last year, CoinShares entered into a sale and purchase agreement to acquire the entirety of Napoleon and its subsidiaries for $14.5 million. The transaction was completed a little over two weeks later, whereby it awaited approval from the French regulator.



During that time, the EU has undergone significant regulatory changes, including a landmark approval by policymakers on the <a href="https://cms.blockworks.co/eu-members-reach-agreement-on-mica/" target="_blank" rel="noreferrer noopener">Markets in Crypto-Assets</a> (MiCA) bill last week. MiCA seeks the implementation of supervisory provisions, consumer protections and environmental safeguards, among other measures.



Policymakers also reached a deal late last month on a <a href="https://cms.blockworks.co/eu-to-require-exchanges-identify-most-crypto-transactions/" target="_blank" rel="noreferrer noopener">new bill</a> aiming to clamp down on crypto money-laundering activity by requiring exchanges and the like to collect and send customer data on transactions with no minimum threshold.



&#8220;After the recent events in the digital asset sector, it has never been more clear that strong regulation is needed for crypto to thrive,&#8221; CoinShares&#8217; CEO <a href="https://cms.blockworks.co/tag/jean-marie-mognetti/" target="_blank" rel="noreferrer noopener">Jean-Marie Mognetti</a> said in the statement, referencing recent market turmoil spurred on by crypto lender <a href="https://cms.blockworks.co/celsius-clashes-with-lawyers-over-chapter-11-bankruptcy-report/" target="_blank" rel="noreferrer noopener">bankruptcy</a> <a href="https://cms.blockworks.co/3ac-files-for-bankruptcy-as-co-founders-location-unknown/" target="_blank" rel="noreferrer noopener">filings</a> and sector-related <a href="https://cms.blockworks.co/crypto-industry-layoffs-may-have-unintended-consequences/" target="_blank" rel="noreferrer noopener">layoffs</a>.



&#8220;Our regulated status in a growing number of jurisdictions is one of CoinShares’ principal strengths; it reassures our clients and demonstrates our plans to lead Europe’s digital asset sector,&#8221; the CEO said.



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acquisition

CoinShares Buys Regulated Crypto Firm, Opening Door to Fund Sales Across EU

Ben Strack

<div id="highlights-block_623b35a2e4ff9" class="highlights">
 <ul>
 <li>Solana’s focus on financial services applications makes the blockchain “very appealing for TradFi allocators,” according to CoinShares CEO Jean-Marie Mognetti</li>
 <li>The exchange-traded product is designed to share staking rewards of 3% per year</li>
 </ul>
 
</div>



Crypto exchange FTX and Europe’s largest ETP issuer are joining forces and will kick off the alliance with a Solana offering.&nbsp;



The partnership’s first initiative is the launch of the CoinShares FTX Physical Staked Solana ETP (exchange-traded product), which will be listed on Germany&#8217;s main market Xetra. The product leverages Galata, CoinShares’ technology platform, as well as FTX’s institutional offerings.



Solana’s ability to timestamp transactions, as well as its speed and scalability features, makes it one of the most advanced layer-1 blockchains, CoinShares CEO Jean-Marie Mognetti said.&nbsp;



“It is often referred to as the chain built by financial services-minded people for financial services applications,” he told Blockworks in an email. “Hence, it makes it very appealing for [traditional finance] allocators who can project themselves into several use cases.”



CoinShares made the deliberate choice to launch such an ETP without sacrificing “the elegance of the underlying technologies,” the CEO added. The product is designed to share staking rewards of 3% per year.



“It was out of the question to do it without being able to transfer a meaningful part of staking rewards to our clients,” Mognetti said. “We now have a way to handle the legal aspect of that whilst ensuring daily liquidity on staking processes with asymmetric unbonding periods.”



On Solana, it takes 3 epochs — or approximately 10 days — for stake to activate or deactivate, according to <a href="https://docs.solana.com/cluster/stake-delegation-and-rewards" target="_blank" rel="noreferrer noopener">the blockchain’s documentation</a>. Asymmetric unbonding means that enough staked assets should be deactivated at intervals to allow the fund to maintain sufficient liquidity for redemptions.



The announcement follows FTX’s launch of FTX Access earlier this month to initially offer advisory services, index products, trade execution, analytical tools and capital introductions for institutional investors.&nbsp;



FTX noted at the time that it would also look to provide custody, derivatives, structured products and other asset management offerings.



Sam Bankman-Fried, FTX’s founder and CEO, said in a statement that CoinShares was “the obvious choice to collaborate with for institutional offerings” and that he looks forward to collaborating with the firm on future products.&nbsp;



Mognetti declined to comment on potential future products and initiatives it could launch with FTX.&nbsp;



Partnerships are no rarity for CoinShares. The company, which manages $3.8 million in assets, <a href="https://cms.blockworks.co/coinshares-seeks-to-reach-more-investors-by-upping-stake-in-flowbank/" target="_blank" rel="noreferrer noopener">boosted its equity stake</a> in FlowBank earlier this month. The Swiss bank will offer exposure to digital assets, as well as features such as holding, staking and lending, through CoinShares’ Galata.    



CoinShares also <a href="https://www.prnewswire.com/news-releases/coinshares-partners-with-scalable-capital-for-their-launch-of-new-crypto-offering-301446397.html" target="_blank" rel="noreferrer noopener">teamed up</a> with Scalable Capital last year as the wealth manager added a Scalable Crypto offering — backed by CoinShares&#8217; physically backed ETPs — to its mobile app. 



The Solana ETP marks the fourth launched by CoinShares this year, all of which have involved staking rewards. The investment firm in January <a href="https://cms.blockworks.co/coinshare-launches-new-etps/" target="_blank" rel="noreferrer noopener">launched Polkadot and Tezos products</a> that are designed to share staking rewards of 5% and 3%, respectively, per year.



It then brought its Physical Staked Cardano ETP to the German market <a href="https://www.prnewswire.com/news-releases/coinshares-launches-cardano-etp-with-staking-rewards-of-3-0-pa-301500590.html" target="_blank" rel="noreferrer noopener">earlier this month</a>.



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CoinShares

CoinShares, FTX Team Up To Launch Solana ETP

<div id="highlights-block_622f9012c18fa" class="highlights">
 <ul>
 <li>FlowBank&#8217;s clients, which can invest in CoinShares&#8217; crypto through derivative products, are set to have direct access to crypto in the third quarter</li>
 <li>The bank will be able to take advantage of more advanced features such as holding, staking and lending in the coming months, according to CoinShares</li>
 </ul>
 
</div>



CoinShares upped its stake in Swiss bank FlowBank as Europe’s largest digital asset investment firm seeks to reach a broader investor market looking for more advanced crypto exposure.



After buying a 9% stake in FlowBank in October, the company acquired nearly 21% more of the bank for roughly $26 million, CoinShares announced Monday.



The Jersey-based firm has no plans to further increase its stake, a spokesperson said.



Founded in 2020, FlowBank is licensed by the Swiss Financial Market Supervisory Authority (FINMA). It allows private and institutional investors the ability to trade 50,000 financial products — such as stocks, ETFs, bonds, options and contracts for difference (CFDs) — on its platforms.



Today, FlowBank&#8217;s clients can invest in CoinShares&#8217; crypto through CFDs, derivative products that pay the difference in settlement price between the opening and closing of a trade.&nbsp;



FlowBank offers 29 crypto pairs against US dollars, euros and Swiss francs, as well as crypto ETPs, a FlowBank spokesperson said. In the third quarter, it will provide clients with direct access to crypto.



“We have witnessed the growth of the crypto industry in recent years as well as the high demand,” the representative said in an email. “As a bank that wants to be at the forefront of its generation we believe in the potential of this asset class for our clients.”



FlowBank already uses Galata — a tech platform built by CoinShares that connects centralized finance platforms to digital asset protocols and markets — to offer digital assets exposure to its clients.



“In the coming months, FlowBank will be able to take advantage of more advanced features such as holding, staking and lending…and will offer exposure to a variety of digital assets to its clients thanks to Galata,” a CoinShares spokesperson told Blockworks.&nbsp;&nbsp;



CoinShares has garnered more than $4 billion in assets under management at the end of 2021, <a href="https://cms.blockworks.co/coinshares-latest-to-benefit-from-booming-interest-in-european-crypto-products/" target="_blank" rel="noreferrer noopener">the company reported last month</a> — about double the amount it managed a year prior.



Its physically backed crypto ETPs (exchange-traded products), available on exchanges such as Euronext, Börse Xetra and Six Swiss Exchange are already a favorite of sophisticated and accredited investors in Western Europe, the spokesperson noted.



“By partnering with FlowBank we are targeting a different type of investors and addressing trading enthusiasts,” the representative added.



CoinShares CEO Jean-Marie Mognetti will join FlowBank&#8217;s board of directors to help guide its digital asset strategy and international development.



CoinShares executives <a href="https://cms.blockworks.co/coinshares-execs-retail-investor-interest-going-beyond-btc-eth/" target="_blank" rel="noreferrer noopener">told Blockworks</a> in December that institutional investors continue considering products focused on bitcoin and ether, but its self-directed customers have become increasingly interested in alternative coins.



The firm in recent months has launched physically backed crypto ETPs focused on Cardano, <a href="https://cms.blockworks.co/coinshare-launches-new-etps/" target="_blank" rel="noreferrer noopener">Tezos and Polkadot</a>, which are designed to share staking rewards with investors.



CoinShares partnered with Scalable Capital in December, allowing the Germany-based digital wealth manager and broker to offer its customers crypto ETPs alongside stocks and ETFs.



At around the same time, it acquired French crypto company Napoleon, which makes available trading and basket agents, aiming to support the construction of better medium- to long-term risk-adjusted performance.&nbsp;



“There is more coming,” the CoinShares spokesperson said. “Simply put, our integrated strategy is underway.”



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Jean-Marie Mognetti

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Blockworks Research