(Rejected) Citi Ventures Makes First Crypto Investment in Hong Kong-Based Digital Asset Manager

Xalts, a Hong Kong-based digital-asset management firm, has raised US$6 million in a capital financing round co-led by Citi Ventures and a California-based venture-capital firm Accel. 

While this is the first digital asset seed investment made by CITIGROUP’S venture capital investing group, Accel previously funded technology firms that include Facebook and Spotify.

Luis Valdich, a Managing Director at Citi Ventures, talked about the development: “The world has changed a lot, you know, with the macro environments, and obviously, markets have been suffering as a result of that. Obviously, we are very prudent in terms of where to and how to deploy capital, but we’re absolutely active with lots of opportunities not only outside of digital assets but also within the digital asset space, which we believe is here to stay.”

Other investors who also participated in the funding round include Polygon co-founder Sandeep Nailwal and other hedge fund managers.

With the fresh funding, Xalts wants to take advantage of what it stated is increased institutional participation in the crypto ecosystem despite this year’s plunge in the prices of digital assets. The firm said it will use the capital to launch multiple fund products tied to digital assets, including mutual funds and ETFs (exchange-traded funds) listed on global exchanges.

Ashutosh Goel, the Co-founder and Chief Investment Officer of Xalts, said his company is expanding its footprints to multiple locations, including Dubai, Singapore, and New Delhi. The other co-founder is the former Meta Asia executive Supreet Kaur.

Citi’s investment in the digital asset firm signals a continued push by banks to grab a piece of the booming $2 trillion crypto market. In June, UK-based Barclays invested an undisclosed sum somewhere in the “millions of dollars” into crypto custody firm Copper’s latest funding raise.

Banks (such as London-based Standard Chartered, BNY Mellon, Citibank, UBS, BNP Paribas, Morgan Stanley, JP Morgan Chase, Goldman Sachs, Barclays, Nomura) are the ones leading in terms of size of funding rounds as a proxy of investment into the crypto space.

Given increased client demand, banks are seeking to increase their exposure to blockchain and crypto services. This has led them to make investments in crypto trading, custody, and asset management.

Image source: Shutterstock