Taurus SA, a Swiss firm developing market infrastructure for digital assets, has raised $65 million in an equity round led by Credit Suisse Group AG, as bigger financial institutions push on with projects despite the prolonged crypto winter.
(Bloomberg) — Taurus SA, a Swiss firm developing market infrastructure for digital assets, has raised $65 million in an equity round led by Credit Suisse Group AG, as bigger financial institutions push on with projects despite the prolonged crypto winter.
Deutsche Bank AG, Pictet Group, Arab Bank Switzerland Ltd and Investis Holding SA also took part in the funding effort, according to a company statement. The deal values Taurus at several hundred million dollars, a person familiar with the deal said, requesting anonymity because the details aren’t public.
Big-name banks are investing even amid a slump in cryptocurrency prices, a swathe of high-profile company collapses and a dropoff in startup investments. Venture capital funding in the industry plunged to the lowest level in almost two years in the fourth quarter of 2022, according to data from research firm PitchBook.
Geneva-based Taurus will use the cash to hire more staff, develop its technology and expand internationally with new offices in Paris and Dubai, Taurus co-founder Sébastien Dessimoz said in an interview.
Founded in 2018, the company’s products allow financial firms to store and issue digital assets including cryptocurrencies like Bitcoin, as well as tokenized versions of securities such as bonds. The startup also runs a regulated marketplace for trading tokenized securities.
Credit Suisse’s involvement shows how some of the larger financial institutions are sticking with digital assets, despite the mayhem in crypto.
Blockchain Goals
The goal for many is to find ways to take advantage of blockchain to boost efficiency and reap savings when issuing, trading and settling traditional securities. While work has been going on for years, there have been few occasions when crypto’s underlying technology has been implemented at scale in traditional finance.
Wall Street Giants Spy Opportunities Rising From FTX Ashes
Credit Suisse, which invested via its Swiss bank division, plans to use Taurus to develop its digital asset offering, which includes advising corporate clients on potential issuances using blockchain technology, Daniel Gorrera, head of digital assets Switzerland at the bank, said in an interview.
“The fact we are making such an investment is a clear testament that there is a future in digital assets,” Gorrera said. “It is part of the overall strategy of Credit Suisse.”
Switzerland’s regulatory and legal framework for digital assets provides clarity for the industry to develop offerings there, he said.
The Swiss bank’s commitment comes as it pushes on with an ambitious revamp —and after it posted unprecedented client outflows and a bigger-than-expected loss for the fourth quarter.
Digital Journey
Deutsche Bank is looking to launch its own digital assets custody service with Taurus, Paul Maley, global head of securities services at the German lender, said in an interview. Deutsche Bank revealed plans to offer custody of digital assets last year, but has revealed few details of its plans.
“Deutsche Bank has not been very visible on this particular topic and that has been deliberate,” Maley said. “We have been searching for a technology partner to help us on the digital asset journey.”
Beyond a handful of deals, investor confidence around crypto has withered after a series of scandals resulted in billions of dollars in losses. The sudden collapse of crypto exchange FTX in November, dealt a particular blow to the industry, triggering a regulatory crackdown.
“What happened with FTX is just showing the need for having a regulated professional financial institution offering,” said Dessimoz at Taurus. “Ultimately we see it as a positive medium-term trend,” and the firm has seen an uptick in demand despite the ructions in the industry, he said.
Taurus has a license from Switzerland’s financial regulator FINMA and works with 25 financial institutions and corporate clients in eight countries. They include retail and online banks, private lenders, broker-dealers and crypto-banks.
–With assistance from Steven Arons.
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