Daiwa Securities takes 10% stake in Singapore’s Penguin Securities

Daiwa Securities Group has agreed to enter into a partnership with Penguin Securities.

The total market capitalization of the crypto asset market as a whole has reached 300 trillion yen level as of the end of February 2024 and major financial institutions have also begun to enter the market with the U.S. Securities and Exchange Commission (SEC) approving physical ETF of Bitcoin on Jan 10, 2024. This has made cryptocurrency-related assets one of the new investment assets and its allocation within the investment portfolio among the wealthy individuals and institutional investors have increased.

In response to these changes in the market environment, Daiwa Securities Group has decided to form a partnership with Penguin Securities HD which is based in Singapore, a “FinTech hub” where regulations surrounding cryptocurrencies and digital assets have been developing, and many fintech businesses have gathered.

Penguin Securities HD is a Singapore-based company co-founded by Yuya Kuratomi, a serial entrepreneur and founder of GMO Cyber Security by Ierae, Kentaro Kawabe, CEO, and Sho Setoguchi, Director. Its subsidiary, Penguin Securities Trading, plans to focus on providing unregulated cryptocurrency derivatives. Another subsidiary, Penguin Securities, is currently applying for the relevant regulatory approvals to allow it to deal in cryptocurrencies, as well as to provide broker-dealing services in relation to capital markets products, including derivatives contracts where the underlyings include a mix of both traditional capital markets products and digital payment tokens. Each subsidiary of Penguin Securities HD intends to roll out its operations as a trusted counterparty, based on the highest level of security and transparent product structure.

Daiwa Securities Group has been focusing on crypto assets and digital securities business since 2016 and has been working on projects across the group to assess its commercialization. 2018 saw the establishment of Fintertech Corporation, a subsidiary of the Daiwa Securities Group, which began offering the first crypto asset-backed loans in Japan in 2020. In 2022, Daiwa Securities, a core subsidiary incorporated in Japan, has commercialized real estate security tokens, one of the digital securities, and since then acted as an underwriter for the total cumulative amount of approximately 33.8 billion yen to date, making it the securities company with the largest share of underwriting in Japan. Through this partnership, Daiwa Securities Group will provide Penguin Securities HD with its financial expertise and knowledge in the high-net-worth business, as well as funding support. Penguin Securities HD plans to share its knowledge in the crypto assets and new alternatives assets to Daiwa Securities Group, and aims to enhance the proposition to their customers.

Also, with Penguin Securities HD`s future expansion into Japan and through this partnership, the partners plan to consider the initiative that will lead to Emerging Management Professionals Promotion Program (Japanese version of EMP).

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