Cantor Fitzgerald taps Anchorage Bank, Copper for custody in $2b BTC leverage business

Financial services firm Cantor Fitzgerald has chosen its partners for its new global Bitcoin financing business that will allow institutional investors to borrow against their Bitcoin holdings. Anchorage Digital Bank and Copper will serve as collateral managers and provide custody of collateralized assets. 

The new business will launch with $2 billion in initial financing to provide leverage to institutional investors who hold Bitcoin, the firm announced on March 11. Cantor Fitzgerald expects the operation to grow significantly.

Large providers will take custody of counterparties’ BTC

Anchorage Digital will hold Cantor Fitzgerald counterparties’ Bitcoin collateral in custody, as well as act as a collateral manager, tracking collateral value, providing reporting, and mitigating counterparty risk. 

Anchorage Digital Bank is a New York Department of Financial Services BitLicense holder and the only federally chartered digital asset bank in the United States, having received a charter from the U.S. Office of the Comptroller of the Currency in 2021. It is the custodian of the crypto seized by the Justice Department.

Copper operates a lending and collateral management platform. It will provide digital asset custody, prime services, and collateral management. It introduced an agency lending platform in February. 

Cantor Fitzgerald announced the addition of Bitcoin financing to its offerings in July. It said at that time that it was selecting custodians. “Cantor Fitzgerald arranges and finances vast amounts of securities and commodities and, as strong supporters of Bitcoin, will now build an incredible platform to support Bitcoin investors’ financing needs,” then-chair Howard Lutnick said at the time. 

Cantor provides custody for Tether backing, gets its support now

Cantor Fitzgerald may have received partial support from Tether Holdings for the new Bitcoin financing business. Bloomberg reported in November that the sides were negotiating Tether’s participation in the project. Cantor Fitzgerald manages Tether’s U.S. Treasurys, which back the $142 billion USDT stablecoin. Bloomberg cited data provided by The Wall Street Journal that indicates that Cantor Fitzgerald owns about 5% of Tether, valued at $600 million.

Lutnick was the chairman of Cantor Fitzgerald until his appointment as U.S. secretary of commerce in February. Lutnick was a donor to U.S. President Donald Trump’s presidential campaign and was co-chair of his transition team. Lutnick’s son Brandon took over the chairmanship at Cantor Fitzgerald, and Lutnick’s son Kyle became vice chair.

The Deutsche Boerse stock exchange is also reportedly preparing to offer institutional settlement and custody services for Bitcoin and Ether after about a year of planning. Bloomberg reported on March 11 that the exchange’s Clearstream unit will begin the service in April and eventually branch out into staking, lending, and brokerage, as well as providing custody for other coins. 

Clearstream head of issuer services and new digital markets Jens Hachmeister said, “With this offering, we are creating a one-stop shop around custody, brokerage and settlement.”

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