Market intelligence specialist Thomas Murray has launched Thomas Murray Digital, a new service that will provide risk assessments of digital asset market infrastructural entities – including exchanges and custodians – whose scrutiny, to-date, has often been unstandardised, ineffectual or simply non-existent.
The assessments, a first for the growing asset class, will inform and enable funds to evaluate, select and monitor the entities that support this new asset class – providing confidence that their assets will be adequately serviced and safeguarded.
Thomas Murray Digital, a subsidiary of Thomas Murray, has been launched in partnership with Alphaplate, a crypto market-maker and proprietary trading firm headed up by digital asset expert Jan Ivar Strømme. The partnership will assist institutional asset owners, fund managers and service providers to understand the capabilities and associated risks of trading and holding digital assets, which have an increasing presence in institutional portfolios. Drawing on deep experience setting standards for the analysis of traditional market infrastructures and service providers, Thomas Murray is uniquely placed in the industry to launch the first digital asset solution for funds.
Simon Thomas, Executive Chairman of Thomas Murray, says: “I am delighted to announce the launch of Thomas Murray Digital at this pivotal moment for the sector. The move is a natural extension to Thomas Murray’s coverage, with a suite of services that provide comfort to investors that their portfolio is well-serviced and safeguarded regardless of jurisdiction, asset class or value. The Alphaplate team is exceptional in its experience in this sector, ensuring that institutional investors will have timely, expert and comprehensive support as they invest in digital assets.”
Jan Ivar Strømme, Managing Partner and co-Founder of Alphaplate, says: “We are excited to be working with Thomas Murray on the Thomas Murray Digital solution. They are a company and a team with a proven track record, as well as relationships with many of the custodians, institutional investors and asset owners moving into this asset class. We at Alphaplate – as active trading participants in the crypto space – have seen an unprecedented amount of involvement, including fund launches and allocations, in the digital asset space over the past 1-2 years. This has been particularly noticeable since the COVID-19 pandemic and the onset of a much more cashless society, with banks taking notice of institutional interest and entering this space in droves. Thomas Murray Digital is a much-needed risk solution in an unregulated marketplace.”
Cryptocurrencies and other digital assets (including tokenised traditional securities and digital-native securities tokens) have emerged as a new asset class in recent years. Their dramatic, albeit volatile, rise in value since 2017 has helped trigger a surge of institutional interest, supported by the need for diversification from traditional currencies and assets that are at increased risk of debasement and inflation due to the unprecedented increases to government and central bank balance sheets and monetary supply arising from the financial crisis of 2007-8 and the COVID-19 pandemic. This interest in digital assets has necessitated the development of investment-grade asset safekeeping and servicing mechanisms required for institutional investors to turn their interest into engagement. The initial ‘Wild West’ era of experimentation is moving inexorably towards more robust systems and governance required by institutions.
While regulation of the sector is still nascent, and it lacks the infrastructure of traditional asset classes, it is beginning to align with institutional investors’ risk appetites – at least for some level of asset allocation. However, there remains a pressing need for trusted, independent validation of the capabilities and operational risks of digital asset service providers to help mitigate manageable risks.
Thomas Murray Digital will support the institutionalisation of the sector by providing standardised data profiles and risk assessments of key providers, backed by its deep understanding of the fundamental principles of asset servicing and safekeeping. It will deploy its expertise and proven technology platforms through comprehensive managed services initially for due diligence, selection and monitoring of digital asset exchanges and custodians.
The service is currently being piloted with a view to launch in mid-2021, with coverage of increasing numbers of assessed entities to follow through 2021.
