Coinbase Buys One River Digital to Bridge Crypto-Institutional Gap

Coinbase has acquired One River Digital Asset Management (ORDAM) to offer institutional clients investment advice.

The purchase, announced Friday (March 3), is designed to further Coinbase’s “goal of bridging the gap between institutions and the cryptoeconomy,” the cryptocurrency company said on its blog. It comes as Coinbase is increasing its focus on regulation as the industry faces increased pressure from federal authorities.

As part of the deal, ORDAM — a subsidiary of One River Asset Management — will be rechristened Coinbase Asset Management.

The two companies have worked together before, with ORDAM using Coinbase Prime for investment solutions under a partnership announced last year, as PYMNTS reported.

“Coinbase and ORDAM share an ethos grounded in prudent risk management, a trait which has enabled both firms to successfully navigate the recent market turmoil,” the announcement said. “Culturally, our two organizations are strongly aligned on pursuing the opportunity in digital assets with an uncompromising priority on safety and soundness.”

During a conference call with investors last month, Coinbase CEO Brian Armstrong said that — in addition to expanding crypto’s worldwide user base to 1 billion — the company was focusing on regulation.

“Policy is my top priority for this year. … Coinbase has an important role to play around crypto education, advocacy, and policy,” Armstrong said, telling investors he had been spending a lot of time in D.C. working alongside legislators.

“There’s a lot of excitement about the potential and desire to have this built here in America by people who realize the U.S. is a little bit behind right now,” he added. “The EU has already passed comprehensive legislation, and policymakers are seeing others that are moving in that direction. There’s a lot of bipartisan support for getting legislation passed.”

But despite Armtrong’s hopes for crypto legislation in the U.S., PYMNTS has argued recently that the sector faces an increasingly uncertain future.

Last week, the British banks HSBC and Nationwide Building Society announced a ban on cryptocurrency purchases using credit cards for their retail customers, as well as tougher restrictions on debit-card purchases of crypto, with a new daily limit of £5,000.

And in the U.S., the Securities and Exchange Commission (SEC) is keeping up its pressure on the digital asset industry by warning investment advisers that cryptocurrency trading and lending platforms are not qualified custodians.

“When these platforms fail — something we’ve seen time and again — investors’ assets often have become property of the failed company, leaving investors in line at the bankruptcy court,” SEC chair Gary Gensler said Thursday (March 2).