TD Cowen Pulls the Plug on its Crypto Unit Cowen Digital

Cowen Digital, TD Cowen’s institutional crypto unit, shuts down, raising questions about strategy amid industry challenges and market shifts.
TD Cowen Pulls the Plug on its Crypto Unit Cowen Digital

The American independent investment bank, TD Cowen, has made the surprising announcement of shutting down its crypto unit, Cowen Digital, just over a year after its launch. 

The bank initially launched Cowen Digital in March 2022 to introduce institutional clients to the crypto market, offering 16 crypto assets including Bitcoin. 

Effective June 1, the closure was communicated through an email that’s been made public by outlets such as Bloomberg News. However, the contents of the mail did not provide an apparent reason for the decision.

Cowen Digital had plans to expand its services to include futures, derivatives, and decentralized finance, and had made executive hires for its European operations. 

However, the closure of the unit raises questions about the bank’s strategy and its commitment to the crypto space. The bank had previously changed following its acquisition by TD Bank Group for $1.3 billion in August 2022.

The shutdown of Cowen Digital comes at a time when several crypto companies collapsed last year, and the U.S. banking and regulatory environment faced challenges in 2023. 

Notably, the email hinted that the Cowen Digital team intends to continue their work under a different organization, emphasizing the importance of trusted counterparties for institutional investors.

Interestingly, this is the second institutional crypto client unit to shut down within a week. Digital Currency Group (DCG), a venture capital conglomerate, recently announced the closure of its prime brokerage subsidiary, TradeBlock, starting May 31. 

These closures indicate a shifting landscape within the crypto industry and raise questions about the challenges faced by institutional players in this dynamic market.

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