American multinational investment giant, Citigroup Inc., is reportedly reevaluating its collaboration with Swiss firm Metaco. Metaco specializes in providing crypto custody services for institutional investors and joined forces with Citi a year ago to develop and pilot the latter’s digital asset custody capabilities. However, recent market volatility has strained the relationships between traditional financial firms and those involved in the digital assets industry.
Reviewing the Partnership
According to undisclosed sources familiar with the matter, both Citigroup and Metaco have engaged in informal discussions with other service providers. Although these deliberations are confidential, the sources have chosen to remain anonymous. The decision behind this review has not yet been disclosed, as a representative from Citigroup declined to comment. The current wave of uncertainty in the crypto industry has led several banking partners to withdraw support or distance themselves from crypto firms.
For instance, EDX Markets, a crypto exchange backed by Citadel Securities, Fidelity Digital Assets, and Charles Schwab Corp., recently abandoned its plan to use Paxos as a custodian. Additionally, State Street Corp., a prominent banking giant, terminated its licensing agreement with crypto custody firm Copper last month, thereby winding down its enterprise infrastructure business. Copper’s partnership with State Street, which began in March of last year, came to an end.
Ripple’s recent acquisition of Metaco for $250 million aimed to expand its services and enable customers to custody their digital assets through its upcoming product suite. Metaco’s Founder and CEO, Adrien Treccani, expressed his belief that the acquisition would allow the Swiss company to scale up in the market. However, given Ripple’s ongoing legal battle with the US Securities and Exchange Commission (SEC) and the contentious nature of custody within the crypto industry, Citigroup’s decision to review its partnership with Metaco, which has been in place since last summer, raises concerns.
Citigroup Inc. is reassessing its collaboration with Metaco amidst turbulent market conditions. The strain on traditional financial firms’ relationships with the digital assets industry has prompted Citigroup and Metaco to engage in informal discussions with other service providers. The reasoning behind this decision remains unknown, as Citigroup has chosen not to comment. The recent withdrawal of support by other banking partners, such as State Street Corp., and the acquisition of Metaco by Ripple, which is currently embroiled in a legal battle, contribute to the perplexity surrounding Citigroup’s review.