New York-based Anchorage Digital has launched a custody and trading platform for RIAs looking to invest in digital assets using separately managed accounts.
The new solution offers advisors custody and settlement services from Anchorage Digital Bank, which bills itself as the first and only federally chartered digital asset bank in the country, chartered through the Office of the Comptroller of the Currency, “which means we can satisfy some really important SEC rules around qualified custody,” said Nathan McCauley, CEO and co-founder of Anchorage Digital.
Proposed tweaks to the Securities and Exchange Commission’s Custody Rule would require more stringent custody requirements for those firms investing in digital assets. The changes would require that digital assets be custodied with a qualified custodian, a role Anchorage Digital Bank hopes to play for advisors.
Regulators’ scrutiny has increased along with the demand for digital asset investments from the RIA market, McCauley said. The new services from Anchorage are a way to capture that market.
“There are going to be more regulated platforms where people are going to want to invest in crypto, and we think that the RIA/SMA structure is a great way to do that,” he said.
Anchorage is providing several back-office services, one of which is to support investments throughout the full trading cycle. Specifically, it will provide secure, regulated and safe custody of the digital assets, McCauley said. It will also offer facilitate block trading and help with tax reporting, he said.
“We’re going to be able to allow people, with our tax integration, to be able to do tax-loss harvesting, which is a nice tax-optimization feature that many RIA/SMAs offer,” he said.
To participate in the service, firms will need to use Anchorage’s technology or work with another firm that already uses it, McCauley explained.
“To participate in the service, an RIA firm must either directly integrate with Anchorage Digital’s APIs [application programming interfaces] or access our services through an already integrated partner RIA,” he said.
The process could take anywhere from a few weeks to a few months depending on how experienced a firm is in working with digital assets, he added. Those advisors looking to take advantage of Anchorage’s services sooner can access them directly through the firm’s digital asset platform partners, Eaglebrook Advisors and Onramp Invest.
