According to people familiar with the matter, the asset management arm of the Bloomberg -- Deutsche Bank AG is in talks to invest in two German criptocurrency firms as part of an effort to revive growth.
The people said the DWS Group, led by Chief Executive Officer Stefan Hoops, has held talks about buying a minority interest in Deutsche Digital Assets, a Frankfurt-based provider of cripto-exchange-traded products. They said Tradias, the market-making firm owned by Bankhaus Scheich, is another potential target.
The people said that the asset manager has held talks about possible ways of collaborating with Galaxy Digital, the firm run by Mike Novogratz.
Hoops, who are trying to restore DWS'reputation after allegations of greenwashing resulted in probes by the US and German authorities, would be wading into a sector marred by a series of recent governance scandals, including the collapse of FTX in November. Hoops outlined a strategy to use digital currencies in December and has been a vocal advocate for new technologies.
DWS isn't the only firm with roots in traditional finance that is mulling expansion in the digital-assets space. As the industry matures, companies from the Bank of New York Mellon Corp. to BlackRock Inc. are betting that the industry will provide lucrative opportunities.
Tradias, which counts German brokerage firm Trade Republic among its clients, was tapped in late 2021 by Frankfurt prosecutors to sell seized cryptocurrencies in a way that created minimal volatility. The people said that, like with DDA, discussions to invest in Tradias center on buying a minority stake.
Representatives for DWS, Tradias and Galaxy didn't want to say anything. DDA had no immediate comment.
Growth and investor confidence are one of the main tasks of DWS, which reported outflows of nearly 20 billion $21.5 billion for 2022 and a €107 billion drop in managed assets.
During an earnings call last week, Hoops said that DWS began to assess strategic partners and begin due diligence on potential targets in areas where it wants to develop new capabilities, such as digital assets. He said that the recent drop in digital asset prices could lead to interesting opportunities for DWS.
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