Ben Strack

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 <ul>
 <li>PolySign plans to launch settlement layer PolyNet in the first quarter of 2023</li>
 <li>The funding round follows the company’s raise of $53 million in May 2021</li>
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Blockchain infrastructure provider <a href="https://polysign.io/" target="_blank" rel="noreferrer noopener">PolySign</a> has raised an additional $53 million as it seeks to eventually offer instant and automatic settlements for a range of cryptoassets.



Participants in the round included hedge fund Brevan Howard, crypto market maker GSR and Cowen Digital. The latter business, which financial services firm Cowen <a href="https://cms.blockworks.co/financial-firm-cowen-unveils-digital-assets-unit/" target="_blank" rel="noreferrer noopener">launched in March</a>, offers custody solutions via Cowen’s partnership with PolySign subsidiary Standard Custody and Trust Company.



The capital was primarily used for the acquisition of fund administrator MG Stover, which the firm revealed in April. The purchase of the company, which had $40 billion in digital assets under administration at the time, accelerates the company’s product development service enhancements for institutional investors and asset managers, PolySign said in a statement.



PolySign CEO Jack McDonald told Blockworks the Series C round funding would also enable the company to add engineers, accountants and client service teams, as well as accelerate its technology spend.



In the short term, PolySign seeks to continue focusing on its custody offerings through Standard Custody and Trust Company as well as its fund administration business through MG Stover. Its third core product, McDonald said, is PolyNet, a settlement layer that would offer instant and automatic settlement for a range of assets. PolySign expects to launch the latter offering in the first quarter of next year.



PolySign has also secured a $25 million credit facility with Boathouse Capital, it said Tuesday.



Emphasizing the importance of institutional investors in the digital asset space, McDonald said in a statement, “A better platform for custody and fund administration is necessary to serve their unique needs and help expand the market.”



The funding round follows PolySign’s raise of $53 million in May 2021. Cowen led that Series B round with a $25 million strategic investment and was joined by Blockchain.com, Race Capital, Sandia Holdings and PilotRock Investments.



McDonald declined to comment on PolySign’s valuations after each round, but according to private-markets data provider Pitchbook, the latest raise pushed the firm’s valuation over $500 million.



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PolySign Nets $53M To Improve Services for Institutions, Asset Managers

<div id="highlights-block_623b365b4e8c8" class="highlights">
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 <li>Cowen’s hundreds of institutional clients could present a ‘captive audience’ for its digital-assets services</li>
 <li>The firm’s investment management unit had around $16 billion under management at the end of 2021</li>
 </ul>
 
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Financial services firm Cowen has launched a digital-asset division as it seeks to lead US banks in the growing segment.



Called Cowen Digital, the Connecticut-based unit offers cryptocurrency trading for institutional investors, as well as custody solutions via Cowen’s partnership with PolySign’s Standard Custody and Trust Company.&nbsp;



“Cowen Digital’s team has had calls with hundreds of potential clients including crypto-native firms, asset allocators, and multi-strategy hedge funds looking to participate in the space,” a spokesperson at the bank told Blockworks.



Cowen <a href="https://www.cowen.com/news/cowen-and-polysign-to-launch-strategic-partnership-geared-toward-providing-clients-access-to-cryptocurrency-and-digital-assets/" target="_blank" rel="noreferrer noopener">partnered with PolySign</a> last May to offer its clients easier access to crypto. Dan Charney, co-president of the bank, said in a statement Wednesday that Cowen Digital has been trading crypto on behalf of its clients for several months.



The division is currently trading 16 cryptocurrencies including bitcoin, ether, chainlink, uniswap, polygon and decentraland, according to a representative.



Cowen Digital will seek to offer financing solutions, derivatives and futures in the future, the company announced, as well as “institutional DeFi and NFT access.”



New York-based <a href="https://www.cowen.com/" target="_blank" rel="noreferrer noopener">Cowen</a> operates as a broker dealer and an investment manager. Its broker dealer division offers investment banking services, equity and credit research, sales and trading and prime brokerage, as well as global clearing and commission management services.&nbsp;



The investment management unit provides actively managed alternative investment products. Cowen reported having $15.8 billion in assets under management, as of Dec. 31.



Drew Forman, who has worked as a managing director and head of equity derivatives for the company, will lead Cowen Digital.&nbsp;



“Cowan has quite a large custody and clearing business, so that means they have hundreds if not thousands of institutional clients that trade through them,” an institutional crypto trading source told Blockworks. “It’s a captive audience and it’s very early. Zero banks offer this.”



Some of the largest Wall Street banks have so far only dabbled in crypto as regulation in the US <a href="https://cms.blockworks.co/bidens-crypto-executive-order-may-be-watershed-moment-despite-lack-of-specifics/" target="_blank" rel="noreferrer noopener">has yet to take shape</a>.



Goldman Sachs recently added to the types of crypto products it trades. Galaxy Digital Holdings <a href="https://cms.blockworks.co/goldman-sachs-makes-milestone-crypto-trade-with-galaxy-digital/" target="_blank" rel="noreferrer noopener">announced Monday</a> that it facilitated its first over-the-counter crypto transaction with Goldman in the form of a bitcoin non-deliverable option.



Ben McMillan, founder and chief investment officer of IDX Digital Assets, said that the move by Goldman is likely to spur other banks to follow suit.



For a bank to launch a digital assets division takes “a huge amount of coordination,” a Cowen spokesperson said, noting that the company spent more than a year establishing the unit.



“Cowen’s organizational structure and in-built entrepreneurial culture means that it can be more nimble when it comes to entering innovative markets like digital assets,” the representative said.



About 40 people across the firm helped establish the unit, and the company intends to grow Cowen Digital to include more than 100 people in the near term.



Cowen Digital is currently able to trade in 35 states and plans to expand globally, a spokesperson noted. It has applied for a BitLicense to operate in New York and is awaiting a response from regulators.



Michael Bodley contributed to this story.



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Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.