Citi Ventures and Accel invest $6 million in digital asset management solutions

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NEW DELHI: Accel, Citi Ventures (Citi’s venture capital investment group) and crypto luminaries such as Polygon co-founder Sandeep Nailwal and other hedge fund managers have invested $6 million in xalts, indicating that Wall Street and Silicon Valley are teaming up to build digital asset management solutions focused on connecting institutional investors to the crypto ecosystem.

Earlier this year, former HSBC trader Ashutosh Goel and former Meta Asia executive Supreet Kaur teamed up to form xalts, an investment management and technology firm focused on real-money institutional participation in the digital asset ecosystem.

“What has come to the fore this past summer at several major crypto companies is the lack of basic checks and balances that most of us take for granted in the financial industry. With xalts, we create innovative, institutional-grade investment products and solutions that emphasize high compliance and control standards, which appeal to institutional investors,” said Goel, Chief Investment Officer, xalts. “The next stage of digital asset growth will be driven by institutional participation in the asset class. We are starting to see the first signs of this with many new initiatives coming from banks and asset managers.”

xalts is expected to launch several fund products related to digital assets, including mutual funds and ETFs listed on multiple global exchanges. The company also leverages its technology platform to partner with multiple asset management firms and staking infrastructure providers to jointly launch and manage mutual funds and ETFs. Additionally, xalts is developing several other products in collaboration with other players in the ecosystem, including a structured products and repackaging platform that will allow institutions to issue structured notes with embedded cryptographic options.

Institutional investor interest in digital assets has grown in recent years. Professional investors traded $1.14 trillion worth of cryptocurrencies on Coinbase Global Inc. in 2021, up from $120 billion in 2020. Earlier this month, financial heavyweights such as Charles Schwab, Citadel Securities and Fidelity Investments announced the launch of a new cryptocurrency exchange, EDX Markets, which also saw participation from companies like Virtu Financial and Paradigm.

“There is a lot of pent-up demand from institutional investors to participate in the digital asset class. However, many institutions we talk to are not able to directly access this ecosystem. Our products and solutions bridge this gap without compromising the high standards of security and compliance expected by institutional investors,” said Kaur, COO, xalts. “Besides investors, we are also seeing great interest from fund managers and issuers to use our platform to launch structured and fund products for their clients We plan to build a team of 30 people by the end of this year in our offices in Hong Kong, Singapore, Dubai and Geneva .”

Luis Valdich, Managing Director of Citi Ventures, said, “Xalts is our first investment in a digital asset manager, and we support its vision to create innovative products to meet institutional investors’ growing appetite for digital asset management. ‘more efficient and more robust cryptographic access’.

“Our thesis is that institutional adoption of digital assets will continue to accelerate and we see great opportunity in this space,” said Abhinav Chaturvedi, Partner, Accel.

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