Galaxy Digital, the crypto group led by US billionaire Mike Novogratz, is expanding into Europe following regulatory action in the US that has prompted a search for more favorable jurisdictions. The group has appointed Leon Marshall, a former executive at crypto broker Genesis, as its first head for Europe. He aims to establish a regional branch in London while competitors retreat in the face of ongoing declines in the value of digital assets.
Marshall told the Financial Times that the progress made in Europe in terms of establishing legal frameworks for trading digital assets has been a crucial factor in his decision. Earlier this year, the EU implemented its comprehensive Mica crypto regulation, aiming to provide guidelines for the industry and protection for investors. Meanwhile, under Prime Minister Rishi Sunak, the UK also aspires to become a crypto hub.
These steps stand in stark contrast to the US, where crypto regulations are fragmented and regulatory authorities have aggressively targeted the market, bringing a series of charges against top exchanges, including Binance and Coinbase.
"The European market demand that we see, combined with the regulatory framework created by Mica, is robust," said Marshall. "This makes Europe a desirable destination for the establishment and growth of crypto firms," he added.
The expansion of New York-based firm Galaxy represents a rare glimmer of hope for a market that has struggled to recover from a loss of trust since Sam Bankman-Fried's FTX exchange failed last year. Token prices and trading volumes have fallen, and companies across the industry have faced a flood of US enforcement measures.
Galaxy, which operates crypto trading, lending, and asset management businesses, has been hit hard by the downturn itself. In the second quarter of last year, the company reported a loss of $555 million after being affected by the collapse of failed stablecoin Terra and its sister crypto token Luna.
Many other crypto firms aggressively cut costs last year, including Binance, Crypto.com, and Gemini.
"We have seen many competitors leave the space, and that provides us with a unique opportunity," said Marshall, who joined Galaxy in June. Previously, he worked at crypto broker Genesis, which ceased all trading and lending activities following the collapse of FTX.
Marshall said he plans to hire staff in investment banking, asset management, crypto lending, and derivatives from Galaxy.
Venture capital firm Andreessen Horowitz has recently chosen the UK capital for its first office outside the US, focusing on crypto and blockchain investments. Sunak said he is "excited" about the move.
Earlier this year, Galaxy formed a partnership with German asset manager DWS to offer investors exchange-traded crypto products. "Galaxy can compete by collaborating with these institutions and offering our own expertise," Marshall said.
