Funding For Digital Asset Firm Led By Credit Suisse

Swiss company Taurus SA raised $65 million from Credit Suisse Group AG to develop digital asset market infrastructure, as many big financial institutions push forward with projects despite prolonged crypto winter.

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A company statement said that Deutsche Bank AG, Pictet Group, Arab Bank Switzerland Ltd, and Investis Holding SA also contributed to the funding effort. An individual familiar with the deal, who requested anonymity because the details aren't public, said the deal values Taurus at several hundred million dollars. 

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Even though cryptocurrency prices have slumped, a number of high-profile companies have collapsed, and startup investments have fallen, big-name banks continue to invest. The fourth quarter of 2022 saw the lowest level of venture capital funding in almost two years in the industry, according to data from Trade Algo.

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Sébastien Dessimoz, Taurus co-founder and CFO, says the company will spend the cash on hiring more staff, developing technology and opening offices in Paris and Dubai.

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It runs a regulated marketplace for trading tokenized securities, and is a startup that facilitates the storage and issuance of cryptocurrencies like Bitcoin and tokenized securities such as bonds. 

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While the crypto market is in a state of mayhem, Credit Suisse's involvement shows that some of the larger financial institutions are still investing in digital assets.

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As part of their effort to boost efficiency and reap savings when issuing, trading, and settling traditional securities, many seek to leverage blockchain. Crypto's underlying technology has been studied and developed for years, but it has never been fully implemented in traditional finance at scale.

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In an interview with Daniel Gorrera, the head of digital assets Switzerland at Credit Suisse, Daniel Gorrera explained that the bank plans to develop its digital asset offering, including advising corporate clients on possible blockchain issuances. 

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Gorrera explained that the investment was part of Credit Suisse's overall strategy. "We believe that digital assets will have a positive future."

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It's easy for the industry to develop offerings in Switzerland thanks to its regulatory and legal framework for digital assets, he said. 

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In the fourth quarter, the Swiss bank posted an unexpected client outflow and a bigger-than-expected loss, which prompted its commitment. 

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According to Paul Maley, global head of securities services at Deutsche Bank, the company is considering offering a digital asset custody service with Taurus. Although Deutsche Bank announced plans to offer digital asset custody last year, few details have been revealed. 

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Despite its lack of visibility on this aspect, Deutsche Bank has been searching for a technology partner to assist the bank with its digital asset journey.

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The sudden collapse of crypto exchange FTX in November dealt a particular blow to the industry, triggering a regulatory crackdown. A series of scandals have resulted in billions of dollars in losses for the industry. 

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Dessimoz at Taurus said that FTX shows the importance of having a regulated professional financial institution. In spite of the industry ructions, the firm has seen an increase in demand, he said. "We see it as a positive medium-term trend."

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A licensed member of FINMA in Switzerland, Taurus works in eight countries with 25 financial institutions and corporate clients, including banks and private lenders, and brokers and brokers-dealers.