Ami Nagata (Zodia Custody): credibility through compliance

Ami Nagata, managing director of Zodia Custody Europe, explains how MiCA is bringing institutional investors into crypto and why Luxembourg's strict reputation matters. Interview.

Can you present the company in a few words?

The company name is Zodia Custody Europe, and we are a custodian of crypto assets. Standard Chartered Bank created us as one of its ventures. Back in 2018, the bank launched a project to have a custodian for digital assets, and then it grew. We became an independent company. Standard Chartered Group remains the majority shareholder, but other groups from across the globe partially own us, such as SBI in Japan, National Australia Bank and Northern Trust. So we are a very institutional crypto custodian. Our head office is in London, and we decided to build our continental European hub in Luxembourg.

It's important that Luxembourg has a very good reputation of being a strict jurisdiction.

How do you see your clients' needs evolving in the crypto world, and how are you adapting to it?

We only face institutional clients, and their needs have shifted quite drastically since MiCA. Before, they were hesitant to go into crypto because no clear legal boundaries existed. Now that MiCA is in place, they are happy to follow the regulatory framework, and they need to make sure that anytime they touch crypto assets, they work with regulated entities. So we really focus on compliance. We obtain all the relevant licences in each jurisdiction so that traditional financial institutions can be satisfied working with us. Market volatility obviously exists, but as a custodian, our focus is to keep the assets secure, regardless of their value. The asset is there and it stays there. The governance is in place so that nobody can move assets without proper consent and proper decision making.

Luxembourg sees the emergence of a crypto cluster. How important is this to get critical mass?

I think it is very important to have a proper ecosystem and the reputation, as a country, to provide all-round services to any investor within Europe. Thankfully, MiCA is passportable, so once we have a licence in Luxembourg, we can passport it to all EEA countries. It’s important that Luxembourg has a very good reputation of being a strict jurisdiction. The fact that a lot of companies obtain a licence from a good, strict jurisdiction gives credibility to them and to the market. Thanks to this framework, more and more traditional companies are coming into the space. Crypto ETFs are being launched, and even the Luxembourg sovereign fund is putting part of its assets into them. It is becoming easier for risk-averse investors to come into the field, so we see lots of opportunities.