Good day everyone,
I hope you are all well and had an excellent weekend, welcome to CryptoGod-1’s blog on all things crypto. Today I will be looking at the recent approval by the FCA in the United Kingdom for Elwood Technologies to provide an execution management system for clients to access security tokens and derivatives.
Elwood Technologies
The Goldman Sachs-backed Elwood Technologies, a leading software-as-a-service ("SaaS") platform that provides institutional-grade access to digital asset exchanges and liquidity venues, announced on Wednesday the 24th of January 2024 that the firm had secured regulatory approval as a service provider. This approval came from the U.K. Financial Conduct Authority and their approval covers Elwood’s execution management system ("EMS") for security tokens and derivatives. This allows Elwood's EMS platform to provide its users with a mode of connecting to global cryptocurrency exchanges and OTC venues through a single application or API.
Elwood was founded by British Billionaire Alan Howard and managed to raise $70m in funding in May 2022. Howard personally made substantial investments in the crypto sector over the years and is known to have supported around 40 cryptocurrency firms. This includes companies such as Polygon and Komainu.
Elwood's Series A round was co-led by Goldman Sachs and early-stage venture fund Dawn Capital, which raised its valuation to $500m. This came amid growing institutional adoption as banks and other financial services firms have ventured more into backing digital asset platforms. The other heavyweights backing Elwood include TradFi specialists Barclays, Citi, and Two Sigma, while Galaxy Digital, Chimera Capital, and DCG also back the firm.
Goldman Sachs is also a known investor in crypto custodian BitGo. Nomura’s crypto arm Laser Digital is one of the investors in WebN, a fintech incubator focusing on blockchain and so-called Web3 startups.
There is optimism at the U.K.-based firm as they now expect TradFi players to invest more in the digital assets market. Despite the 2022 setback which saw the market crash, especially upon the news of FTX filing for bankruptcy in November of that year, Elwood hope to see the recent market rounds have a longer term impact on overall investment in the market.
Elwood is also one of the few crypto firms to make it through rigorous registration process with the UK's markets watchdog. Their SaaS platform includes risk representation and analytics tools along with the EMA system, and have already received SOC2 and ISO 27001 information security certifications.
The chief executive of Elwood, Chris Lawn, noted as much when he stated:
“Elwood is proud to become one of the first digital asset technology firms authorised as a service company by the FCA. Institutional investors are increasingly looking for a digital asset SaaS platform that meets robust regulatory standards akin to those in traditional finance. Securing FCA approval supports this need and marks another step in Elwood’s mission to provide an end-to-end digital asset platform in a regulated and transparent manner from the UK, one of the world’s leading financial services jurisdictions.”
Goldman Sachs’ head of digital assets, Mathew McDermott, noted that the recent approval by the FCA has indicated the progress Elwood has made in creating a regulatory-compliant digital asset infrastructure. He noted in a recent statement:
“Today’s announcement shows Elwood’s progress in meeting the consistently increasing need for institutional grade, regulatory compliant digital asset infrastructure. We are excited to be a key stakeholder of Elwood Technologies and encouraged by the strides taken in the UK to bring digital asset companies in line with the strong regulatory expectations of the traditional finance world.”
The process of the FCA involves a multi-step process which authorizes companies to operate within the cryptocurrency sector. Companies need to initially check if their activities fit within the Money Laundering Regulations and the FCA’s rules. If so, they need to get approval from the FCA and will be listed in the FCA’s register along with receiving a unique identification number.
An Elwood Board member and General Partner at Dawn Capital, Josh Bell, noted:
"This is a pivotal moment for Elwood on its ambitious growth journey. The FCA only authorises fintechs that meet incredibly stringent regulatory standards. Achieving this status is further proof of Elwood's market-leading position, and will help the company deliver for major institutional investors in the long term. A rapidly growing number of institutions today want what Elwood offers: a fully regulated, compliant platform that can aggregate prices, route orders, and provide broad access to liquidity. What a great start to 2024, and congratulations to the entire team."
There is also a podcast on Finoverse titled - Episode #34: James Stickland CEO at Elwood Technologies
Have a great day.
Peace. CryptoGod-1.
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