Nomura’s Crypto Arm Might Take Longer Time to Turn Profitable After Market Rout: CEO
Laser Digital, the digital asset subsidiary of the Japanese financial services giant Nomura, might take a longer time to turn profitable than expected, as the company is still grappling to recover from the sector’s turmoil.
Laser Digital had previously forecasted to make profits by 2024. However, in an interview with Bloomberg, the company’s CEO Jez Mohideen noted that the firm has been hit by the crypto industry’s turmoil, which would delay its profit making growth.
“Our profitability journey may take a bit longer than we forecast a year ago. Volumes have come down, activity has shrunk, regulators’ needs are changing - all these are leading to some delays in our overall journey including profitability.”
In December 2022, Mohideen noted that Laser Digital would break a profit within two years, as there is a demand for safer alternatives in the crypto sector, following the spectacular failure of Sam Bankman-Fried’s FTX exchange.
The crash, which wiped out $2 trillion of crypto market value, took a toll on the entire sector, causing repercussions to numerous exchanges and crypto-centric firms.
“We’ve run all the stress tests and assuming worst-case scenarios in terms of market volume, price volatility, we believe we can turn profitable within two years,” he said at the time.
The company also planned to add more workforce by this March, stating that it's easier to hire talent and acquire assets at a lower valuation. Laser Digital has hired 70 staff so far and plans to add up to 20 more over time, Mohideen noted.
“The crypto subsidiary of Nomura is setting up an office in Tokyo to offer support to its global trading business. The company will hire 4 to 6 people in its Tokyo office.”
He further added that the entry of more institutions and institutional projects coming into the crypto sector despite the market rout gives him “confidence.” Investment management firms like BlackRock, and other financial institutions have recently entered the market bull run.
“The future is brighter but it may take longer,” he added.