CrossTower

CrossTower to acquire institutional prime brokerage BEQUANT

It comes after months of window shopping by CrossTower as crypto companies are still looking to expand despite the crypto market downturn.

Cryptocurrency exchange CrossTower Inc has agreed to buy digital asset trading platform BEQUANT, which comes after months of window shopping by CrossTower for crypto companies including a recently revised offer for Voyager Digital’s assets.

The Nov. 28 acquisition agreement will provide CrossTower with over 600 new professional exchange clients in addition to its existing clientele. The incoming clients are based across the United States, Europe, Asia and Latin America and are collectively turning over $400 billion annually.

The purchase agreement comes as CrossTower CEO Kapil Rathi stated on Nov. 24 that CrossTower has long been on the lookout to buy digital asset companies with a “good set of customers” and a “good balance sheet,” which included a second look at the now-bankrupt cryptocurrency lending platform Voyager, who is back on the market after its initial agreement with FTX recently fell through.

Rathi said the access to over 600 exchange clients through the BEQUANT acquisition would also better position the firm to assist in re-establishing industry trust, which has been significantly dampened by recent events with FTX.

CrossTower’s deal is being backed by London-based financial services firm Lydian Group, with CEO Gerard Lopez stating that he hoped CrossTower’s acquisition would lead the way in bringing more professionalism and transparency to the industry.

CrossTower introduces ESG Crypto Fund

The trading platform also announced its offering of an Environment, Social, and Governance (ESG)-focused Crypto Fund, which will invest in “promising” companies that demonstrate a sufficient level of social and governance accountability, in addition to efficiently managing energy costs.

While CrossTower didn’t disclose any potential companies that may become part of its new fund, but the trading platform said it would look for companies that aren’t fueled by “greed” and instead prioritize “the democratization of finance.”

CrossTower added it would look for digital asset companies with a “proper board structure […] checks and balances, and traditional business expertise,” adding the crypto companies “in trouble” today are due to “human failure.”

The announcement of CrossTower’s ESG Crypto Fund comes as a number of industry leaders recently told Cointelegraph that the Ethereum Merge , which took place on Sept. 15, would become a “big factor” behind institutional investment decision-making, particularly for firms like Fidelity Investments, BlackRock and Goldman Sachs who have ESG mandates.

Interestingly, a June study by investment management firm Morningstar found that 80% of investors who hold ESG-themed investments also own cryptocurrencies, as reported by CNBC.

By contrast, the study also found that only 22% of non-ESG investors own cryptocurrencies.

CrossTower eyeing further crypto acquisitions outside of Voyager bid

CrossTower’s president said they would place extra emphasis on highly transparent and compliance-focused companies in light of the FTX collapse.

Crypto exchange CrossTower Inc., which is currently bidding for the assets of Voyager Digital, is reportedly window shopping for other crypto company acquisitions.

In a Nov. 24 Bloomberg report, CrossTower CEO Kapil Rathi revealed that the company is looking to pick up firms with a “good set of customers” and a “good balance sheet” despite the current bear market, stating:

“We’re in a great place to either acquire entities who have a good set of customers with them and a good balance sheet […] so we are openly looking at different types of companies from an organic growth perspective.”

In September, CrossTower was one of the companies reported to be competing to acquire the assets of bankrupt crypto lender Voyager Digital, along with FTX and Binance.

FTX Trading eventually became the winner of the Voyager bid on Sept. 27 with the sale valued at $1.4 billion.

However, with the exchange filing for bankruptcy filing on Nov. 11, Voyager reopened the bidding process and a new revised offer came from CrossTower on the same day.

“We are working on a revised offer that we feel will benefit the Voyager customers and the wider Crypto community. CrossTower has always been, and will continue to be, very community-focussed,” a spokesperson told Cointelegraph at the time, without specifying an amount.

While CrossTower has still yet to disclose any details on its latest bid for Voyager, CrossTower president Kristin Boggiano stated that Voyager’s small $3 million FTX investment wouldn’t play a factor in a potential sale for the lending platform.

CrossTower also stated that it has “minimal exposure” to FTX-related investments.

Other companies back in line to buy out Voyager’s assets include Binance and blockchain-focused venture capital firm Wave Financial, who had also expressed interest in the initial auction for Voyager’s assets in September.

In light of recent events with FTX, Boggiano stated that the firm has now placed an extra emphasis on companies that are highly transparent and compliance-focused:

“There’s an opportunity in this market to provide a compliance focused platform and to bring the transparency and trust that people have been hoping for.”

However, Rathi said the trading platform’s risk appetite to buy out companies has leveled off with the firm looking to adopt a slightly more cautious approach over the short to mid-term.

CrossTower is a United States crypto asset exchange that was founded in 2019. It’s a relatively small exchange with only $103,816 in trading volume over the last 24 hours with 13 spot markets, according to CoinMarketCap.