Nomura’s crypto arm seeks profit in two years in shakeout after FTX crisis

livemint.com:

Nomura Holdings Inc. plans to break a profit at its crypto unit within two years as the spectacular failure of Sam Bankman-Fried’s FTX exchange spurs demand for safer counterparties in the digital-asset sector.

The unit, Laser Digital, will leverage the backing of the Tokyo-based investment bank to win over institutional investors and plans to add 50 employees by March, its Chief Executive Officer Jez Mohideen said. It’s now easier to hire talent and acquire assets at a lower valuation, he said, adding that the firm has tightened risk management. 

“The latest events in the crypto market will provide an opportunity for us as it will drive institutional investors to digital-asset firms backed by traditional finance houses," Mohideen said in an interview. “We’ve run all the stress tests and assuming worse-case scenarios in terms of market volume, price volatility, we believe we can turn profitable within two years."

Nomura’s launch of its digital-assets arm in September, one of the boldest embraces of the sector yet by a global financial firm, came amid a deep rout in crypto markets that was exacerbated by the bankruptcy of FTX last month. 

Other lenders are also seeking to make a mark on the industry. Singapore’s DBS Group Holdings Ltd. is already offering digital currency trading for wealthier clients, while Goldman Sachs Group Inc. plans to invest tens of millions of dollars in crypto firms, according to a report. JPMorgan Chase & Co. is exploring the use of blockchains for transactions like collateral settlements. 

“We can’t look at this asset class based on the market price," 49-year-old Mohideen said. “You need to believe in it, invest in it and take a five-to-10 year view." 

Nomura has made a “significant"