Coinbase Acquires One River Digital Asset Management

Cryptocurrency exchange Coinbase (COIN) said it bought One River Digital Asset Management, an institutional digital-asset manager, as it looks to expand beyond its core business catering to retail customers.

One River Digital, a U.S. Securities and Exchange Commission-registered subsidiary of One River Asset Management, will become Coinbase Asset Management and will "form the foundation" of Coinbase's investment advisory service for institutional clients, the exchange said in a blog post Friday. Terms of the deal weren't disclosed.

Coinbase has been looking to expand beyond its core retail trading business in response to the drop-off in transaction volume in recent months. Institutional investment management forms a part of that strategy, as does its move into the developer sector through its new layer 2 blockchain Base. It released Base's test network last week.

“This is about wanting to bring more institutional capital into the world of crypto,” Greg Tusar, Coinbase’s head of institutional product, told Bloomberg. “We expect to build – on the other side of this crypto winter – an awesome asset-management business.”

Some of Coinbase’s institutional products have come under scrutiny from regulators who have been taking a closer look at the crypto industry after the collapse of crypto exchange FTX.

Coinbase Asset Management, which will operate as an independent unit, will be helmed by CEO and Chief Investment Officer Eric Peters, who is also CEO and CIO of One River Asset Management.

Coinbase and One River Digital teamed up in February last year to offer One Digital's separately managed accounts to Coinbase Prime users, allowing them to hold the assets themselves while benefitting from the expertise of an external asset manager.

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UPDATE (March 3, 16:12 UTC): Adds comments by Greg Tusar in fourth paragraph, background starting in fifth.