Nomura Unit Prepares To Trade Crypto, Increase Staff By 45%

The crypto unit of Nomura – one of Japan’s biggest banks – aims to grow its team to 55 in the next three months by tapping talent in the world’s top financial cities.

Laser Digital, established in September, is also seeking to trade crypto itself and launch a dedicated trading platform in the first quarter of 2023. Jez Mohideen, the firm’s CEO, told Blockworks that part of the operation will include high-frequency trading, market making, and proprietary trading.

Nomura is Japan’s top brokerage and investment bank, managing $442 billion in assets as of this month. The bank first publicly announced its intentions to offer institutional clients the ability to trade crypto products in May.

The crypto unit works somewhat independently of Nomura. It is focused on deploying its own capital to establish cryptoasset management and venture capital (VC) investment engines.

Laser Digital is looking to increase the number of employees across its Swiss headquarters along with the other initial centers in Dubai and London. In stage two, it will explore setting up in Nomura’s home turf of Japan, and eventually in the US.

Mohideen sees his VC effort as the firm’s most mature vertical. Nomura’s crypto journey began over four years ago by incubating and investing in custodian Komainu.

“The focus will be on investments pre-seeded to Series A in innovative Web3, DeFi, blockchain infrastructure, especially that accelerate the institutionalization of digital assets,” Mohideen said.

As for Laser Digital’s trading platform, the firm plans to cater to institutional clients, family offices, high net worth individuals and hedge funds actively involved in the crypto space.

“Once regulation comes through depending on the jurisdiction, we will open up a customer base,” Mohideen said.

Nomura was cautious about crypto at first

Mohideen’s stint at Nomura began in February 2018 when he joined as chief digital officer, looking for commercially driven digitization opportunities for the wholesale banking business.

He has another role as director of Komainu, where Nomura is the largest investor. As of 30 September, he shifted his focus entirely to Laser Digital. Currently, the 38-member team includes 17 people who transferred from Nomura’s digital office, while the rest come from a mix of TradFi and crypto institutions.

“The deep skills we’ve acquired in quant, electronic trading platform building and rigorous risk management skill sets. So that’s what we hope to bring,” Mohideen said.

“I think these kinds of skills are invaluable for the institutionalization of digital assets. There’s no doubt that everyone in the crypto ecosystem is waiting for institutions to come in.”

Nevertheless, Laser Digital will have its work cut out. The planned growth comes as the industry looks to recover from Terra’s collapse in May and the subsequent bankruptcy of high-profile crypto lenders Celsius and Voyager.

At the same time, broad macroeconomic factors such as higher inflation, the war between Ukraine and Russia, and energy issues in Eastern Europe are challenging both traditional capital market performance and crypto ecosystem participants, leading to high correlation.

Marquee crypto companies like Coinbase, Blockchain.com and OpenSea cut staff earlier this year in preparation for a prolonged downturn. Digital collectibles startup Dapper Labs and financial services firm Galaxy cut staff as recently as last week.

With a long-term approach in mind, Laser Digital is currently awaiting regulatory approval in Dubai, along with a long list of other crypto firms. In any case, Mohideen expressed that the firm is in no rush to become hugely profitable in the next year or two.

Nomura’s management was wary of launching a segregated crypto business, Mohideen added, but is now clearly on board.

“For us, it’s taken a while, a lot of work, and we’ve gotten to a point now where the firm is a firm believer. It’s a project that needs to be done,” Mohideen said.

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