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Goldman Sachs Sets Sights on Crypto Firms Post-FTX

Goldman Sachs executive Mathew McDermott announced that the leading investment banking  firm is reportedly looking into buying out crypto firms after the FTX collapse.

Crypto company valuations have taken a huge plummet after the fall of Sam Bankman-Fried’s crypto empire – and big banks are reportedly looking to seize the opportunity to purchase or invest in crypto firms while prices remain low.

Mathew McDermott, an executive at Goldman Sachs, reportedly said that big banks – including Goldman Sachs – are seeing big opportunities for expanding business to digital assets, as FTX’s collapse highlights that the industry needs to be more regulated.

As of the moment, McDermott says that Goldman Sachs is looking at investment opportunities that are “priced more sensibly”, and is already doing due diligence processes on some crypto firms. 

While McDermott views that while the public remains to view FTX as the norm or “poster child” for crypto, the underlying tech behind crypto “continues to perform”. 

Goldman CEO David Solomon has expressed that he views crypto as “highly speculative”, but has huge potential once crypto infrastructures become more formalised, around the peak of the FTX debacle on Nov. 10.

Meanwhile, FTX’s collapse has surged Goldman’s trading volumes since. According to McDermott, investors have been looking to trade with regulated and well capitalised entities, with his suspicions that “a number of them traded with FTX, but I can’t say that with cast iron certainty.”

Goldman has been fairly adventurous in comparison to other fiat banking giants – having invested in 11 companies that work in providing crypto services – ranging from analytics, blockchain management, and compliance.

However, other banking giants aren’t so keen to jump on board to invest more in crypto quite yet. At a banking conference in London last week, HSBC CEO Noel Quinn has been reported to have said that he has no plans to expand business to crypto trading or investing for retail customers.

On December 1, Morgan Stanley CEO James Gorman expressed the following sentiments about crypto: “I don’t think it’s a fad or going away, but I can’t put an intrinsic value on it,” at the Reuters NEXT conference. On another hand, other institutional players like Britannia Financial Group are looking to build upon its crypto offerings, as they also see this crypto meltdown being a chance to expand.

“We have seen more client interest since the demise of FTX,” said Britannia’s chief executive, Mark Bruce. “Customers have lost trust in some of the younger businesses in the sector that purely do crypto, and are looking for more trusted counterparties.”

On December 6, crypto-focused firm SEBA Bank announced a partnership with financial services firm HashKey Group in order to accelerate institutional adoption of digital assets in Hong Kong and Switzerland – opening up more opportunities in bringing digital assets to retail customers. 

Noting that Hong Kong is a leading jurisdiction in the provision of licensing for crypto products and services, SEBA Bank CEO Franz Bergmueller sees perfect opportunity in expanding where and how crypto can be used within the region. 

Working alongside HashKey, where its executive Michel Lee notes that its operations are conducted under a “regulatory-first approach”, both SEBA and HashKey are keen to bring compliance and regulation to safely and swiftly bring crypto to mainstream adoption in both territories.

A few months ago, another digital asset service from an institutional player was reportedly introduced: United States stock exchange Nasdaq has been noted to prepare for digital asset  custody solutions for institutional investors, with products such as Bitcoin and Ether custodial services.

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