Deutsche Bank’s asset management arm is reportedly in discussions to invest in two German crypto companies.
According to a Feb. 8 Bloomberg report citing “people familiar with the matter,” DWS Group CEO Stefan Hoops is currently in talks to buy a minority stake in Deutsche Digital Assets, a crypto exchange-traded products provider. It’s also in talks with Tradias, a market maker firm owned by Bankhaus Scheich — a traditional finance market maker.
Hoops has been bullish about the opportunities presented in the digital assets space.
During a recent earnings call, the executive said that DWS has “started to assess strategic partners and commence due diligence on potential targets” where it expects to gain a foothold, including digital assets.
The downturn in digital asset prices could result in “interesting opportunities" for DWS, he said.
Speaking about the bank's strategy for the crypto industry, Hoops mentioned a plan to build or acquire "various specific blockchain-related services."
According to Deutsche Digital Assets’ website, the firm offers investors exposure to crypto assets through a variety of investment vehicles, ranging from passive to actively managed funds, as well as white-labeling services for asset managers.
Tradias is an over-the-counter (OTC) trading platform for cryptocurrencies and security tokens created by Bankhaus Scheich in 2020, providing crypto loans and liquidity services.
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DWS is reportedly making the venture investment to revive growth and regain reputation following probes in Germany and the United States for tax fraud and greenwashing.
DWS and Deutsche Bank offices were raided in May 2022 by Frankfurt prosecutors, after they found “sufficient evidence” that ESG standards were applied only to a minority of assets, contrary to their marketing claims.
Germany is considered to have one of the friendliest tax regimes for long-term crypto holders, as the country charges zero capital gains tax on the sale of crypto held for over a year.
According to an October crypto ranking that evaluates factors such as crypto outlook, clear crypto tax rules, and more transparent regulatory communication, Germany ranks among the most favorable crypto economies.