Fidelity

Fidelity Digital Assets, which launched in 2018, attributed the revenue decrease

 across its UK arm to a drop in so-called service-level agreement fees and foreign exchange fluctuations.

These relate to digital asset management services provided to its parent company, Fidelity Investments, as well as introducer fees earned when a prospective client is introduced and onboarded as a new customer.

Operating expenses increased 32% year-on-year to £7.8m, mainly due to a rise in staff salaries and benefits from £1.6m to £3.2m.  

Chris Tyrer, head of institutional at Fidelity Digital Assets, who left in January 2023 after four years in the role, previously told Financial News that the business was recruiting more people amid a “more straightforward” hiring market caused by the downturn in crypto in 2022.

Tyrer has since joined crypto exchange Bullish as head of strategy.

Overall the UK business of Fidelity Digital Assets incurred a loss of £7.1m for 2023, up from £2.5m in 2022.

“The company continues to expand its digital asset product and service offerings,” said Fidelity Digital Assets in its accounts. “Revenue is forecasted to grow upwards with increasing business activity in… custody and trading services, as additional new clients are expected to be onboarded.”L

The global crypto custody space is becoming competitive, with some of the biggest tradfi names entering the market. Standard Chartered owns London-based crypto custodian Zodia Markets, while Japanese bank Nomura entered the crypto custody space in 2018 with the launch of Komainu.

BNY Mellon went live with its crypto custody platform in the US in October 2022, and Deutsche Bank partnered with Swiss crypto startup Taurus to start offering crypto custody services in September 2023.