The crypto industry is experiencing the «second generation» of rules, according to Julian Sawyer, CEO of Standard Chartered-backed Zodia Custody, in a conversation with finews.asia. The region is filling the void for the US, which still lacks regulatory clarity. 

US regulators and Binance recently reached a landmark settlement deal that could potentially mark the peak of crypto enforcement and set the standard for governance moving forward. While this may be welcome news for the future, other jurisdictions have not stayed idle.

According to Zodia Custody CEO Julian Sawyer, the industry is experiencing a so-called «second generation of crypto regulations» in markets such as Hong Kong or Singapore.

«In the first iteration, regulators were beginning to get familiar with the asset class, the risks and how to control trading outside their jurisdiction. Now, there is a much greater understanding,» he explained in a conversation with finews.asia. «It's a shame that the United States is not on this journey and I think people find that Asia is filling the void incredibly well.»

Market Presence

Zodia Custody is currently present in four markets within Asia Pacific: Australia, Hong Kong, Singapore and Japan. In Europe, it has a presence in the UK, Ireland and Luxembourg. And in the Middle East, it has built a presence with its main shareholder, Standard Chartered. On the US, Sawyer noted that it will take a while before a market entry.

«In the US, we do not have clarity yet and I think it is going to take some time to ensure we get that exact regulatory roadmap,» said Sawyer, who was the former CEO of Bitstamp, the world’s longest-standing crypto exchange. 

Zodia's offering is currently focused on providing custodian solutions under English trust law to institutional clients. Its custody services cover cryptocurrencies stablecoins and, in due time, tokenized assets as well. 

TradFi Demand

On the client base, Sawyer highlighted that crypto natives account for the largest share of the business but he is observing «seismic shifts» from traditional financial institutions, contemporarily referred to as «TradFi».

«There are many positive drivers including greater regulatory clarity or the expected issuance of crypto-linked ETFs next year,» he explained. «We have also seen a huge impetus around stablecoins.»

Moving forward, Zodia Custody will be hiring a general manager for Hong Kong and building out a virtual APAC hub. By the end of 2024, the firm expects to have around 40 staff in the APAC region.