Monex Group expands crypto business with stake in 3iQ Digital

abdelaziz Fathi

Monex Group is set to acquire a majority stake in Canadian digital asset investment fund manager 3iQ Digital Holdings, Inc., as the Japanese financial services giant aims to expand its crypto business.

Based in Ontario, 3iQ is recognized for launching the first regulated exchange-listed funds for Bitcoin and Ethereum in North America. The firm also introduced Bitcoin and Ethereum ETFs on the Toronto Stock Exchange and was the first to add Staking capabilities to an Ethereum ETF.

3iQ also manages private investment funds, which started as a private placement available only to accredited and institutional investors in Canada. Its exchange-traded products provide stockholders with direct exposure to bitcoin value. The non-redeemable investment funds aim to achieve capital appreciation through a long-term holding strategy.

Yuko Seimei, CEO of Monex Group, said that the acquisition aligns with their long-term strategy to expand their asset management business. He expects the deal to help capture the growing demand for crypto asset management among institutional investors and exchanges worldwide.

“We’re eagerly looking forward to being a part of the Monex family, especially collaborating with Coincheck – Japan’s crypto exchange powerhouse with a staggering 1.8 million customer accounts. Imagine the synergy. With 3iQ’s expertise in crafting exceptional crypto-asset products, we’re poised to bolster Coincheck’s offerings, especially for institutional investors. This is beyond a win-win – it’s a joyous, groundbreaking collaboration that promises to reshape our industry,” added Frederick T. Pye, Chairman and CEO of 3iQ.

Recently, 3iQ launched the 3iQ Managed Account Platform (QMAP), offering a suite of crypto hedge fund managed accounts, targeting institutional investors. To lend support to the fund, 3iQ addressed the questions of pricing, custody, audit, and public interest issues in a regulated investment fund. It acts as the investment and portfolio manager of the fund, while New York-based crypto exchange, Gemini Trust fulfils the functions of the custodian of the bitcoins held in the fund.

In this transaction, Monex Group was advised by TD Cowen and Osler, Hoskin & Harcourt LLP, while 3iQ was advised by Cinaport Capital Inc. and Wildeboer Dellelce LLP.

Monex’s recent fincnial results show that its operating income in the US Segment (TradeStation) has improved since the strategy change in 2022. The company attributed the improved profitability to cost reduction and the higher financial income driven by the interest rate hike.

In addition to the steady earnings of the Japan and US segments, the group anticipates its crypto business to have upside potential when the digital asset market recovers. The crypto-focused offshoot leverages the brokerage industry expertise of its parent to address what it perceives to be key concerns and certain weaknesses in the current cryptocurrency ecosystem.

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