Standard Chartered to serve hedge funds and asset managers via crypto prime brokerage

Standard Chartered is setting up a crypto prime brokerage aimed at hedge funds and asset managers, as banks worldwide scramble to keep up in the crypto race. The new business will sit inside SC Ventures, the bank’s venture capital arm, according to Bloomberg.

The bank isn’t new to crypto. It has already backed projects like Zodia Custody, which handles secure storage, and Zodia Markets, an institutional trading platform.

Just six months ago, it said it was the first big, systemically important global bank to offer spot crypto trading to institutional clients.

SC Ventures shields bank from capital rule penalties

Last month, SC Ventures dropped a post on LinkedIn, teasing a joint venture called Project37C, which it described it as a “light financing and markets platform” that will include services like custody, tokenization, and access to digital markets. No outside firms were named, and the post didn’t use the phrase “prime brokerage.”

By keeping the new business inside SC Ventures, Standard Chartered may be sidestepping some brutal capital charges.

Under Basel III rules written up in 2022, banks have to apply a 1,250% risk weight to “permissionless” crypto assets like Bitcoin and Ether held on their balance sheets. That’s huge compared to the 400% charge slapped on some venture capital bets. Setting it up away from the main bank arm could be the only way this thing ever sees daylight.

Global regulators, meanwhile, are still arguing about how to handle crypto holdings for banks. As of October, they were still going back and forth. That uncertainty hasn’t stopped the U.S. giants from diving in either.

Over in America, JPMorgan is reportedly looking into offering crypto trading for its institutional clients. Morgan Stanley just filed paperwork to launch Bitcoin, Ether, and Solana ETFs. That would throw them into direct competition with BlackRock and ARK, both already elbow-deep in this space.

Those spot crypto ETFs in the U.S. have now ballooned to roughly $140 billion in assets. That’s only two years since they were first allowed. More and more big money is sliding into the space, and firms are trying to build out infrastructure to match it.

Prime brokerages help institutional clients handle things like financing, custody, and trading in one place. As more hedge funds get involved, this part of the market is exploding.

Ripple dropped $1.25 billion in April to buy Hidden Road, a major brokerage. In October, FalconX said it was buying 21Shares, one of the largest ETF issuers in crypto.

The timing isn’t random either. Bitcoin is hovering just above $92,000 as 2026 trading begins. It had slumped to $90,000 but is only down 2% over the past year. According to Brian Vieten at Siebert Financial:-

“Bitcoin is consolidating around $90,000 after a prolonged selloff tied to tax-loss harvesting and fears MSCI would exclude digital-asset treasury companies from major indices.”

MSCI has now backed off that idea, saying those treasuries act more like funds. That means one less thing to worry about in a space already loaded with question marks.

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