Fidelity Digital Assets, the cryptocurrency custody arm of Fidelity Investments, has revealed a drop in revenue of nearly 60% and losses exceeding £7 million for the previous year.
According to a recent report from the Financial News, the company generated £545,000 in revenue during the 12-month period ending in December 2023, a notable decrease from £1.34 million in the preceding year.
The decline in revenue for Fidelity Digital Assets, which was established in 2018, can be attributed to a decrease in service-level agreement fees.
These fees are associated with digital asset management services provided to its parent company, Fidelity Investments, as well as introducer fees earned when new customers are introduced and onboarded.
Operating expenses for the unit rose by 32% year-on-year, reaching £7.8 million.
The increase was primarily driven by higher staff salaries and benefits, which surged from £1.6 million to £3.2 million.
Overall, Fidelity Digital Assets experienced a loss of £7.1 million in 2023, up from £2.5 million in 2022.
Despite the financial challenges, the company remains optimistic about its future prospects.
In its accounts, Fidelity Digital Assets stated that it continues to expand its product and service offerings in the digital asset space.
The company forecasts revenue growth as it anticipates increased business activity in custody and trading services, with the expectation of onboarding additional new clients.
The global crypto custody industry is becoming increasingly competitive, with established traditional finance names entering the market.
For instance, London-based crypto custodian Zodia Markets is owned by Standard Chartered, and Nomura, a Japanese bank, ventured into crypto custody in 2018 with the
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