During the period of seeking a sale, there were changes in management at the crypto custody company Copper. Reports indicate that CEO Amar Kuchinad has resigned, but the company is still proceeding with the sale process. Current public information shows that the target valuation for Copper is approximately $500 million, while potential buyers' bids are close to $200 million, indicating a significant gap between the two parties.
After being on sale for four months, CEO has stepped down.
On September 8, reports cited sources familiar with the matter as stating that Kuchinad has left Copper, but the reports did not provide reasons for his departure, nor did they disclose the last date of his tenure. The company has also not yet announced a temporary or permanent successor.
The sale process for Copper has lasted for about four months. People familiar with the matter say that Cantor Fitzgerald is representing the company in contacting potential buyers and is pitching it with a valuation of around $500 million. So far, Copper has not announced any sale agreement, and it is not possible for outsiders to confirm the number of buyers, the terms attached to the bids, or whether the company has adjusted its asking price.
There is still a significant gap between the quoted price and the asking price.
Copper began to be explored for sale at least from May of this year. At that time, there were reports that Cantor Fitzgerald was responsible for the related processes. By August, potential buyers had emerged, but foreign media reported that the bids were close to 200 million US dollars.
If the final transaction price approaches this level, it will be about $300 million lower than the $500 million currently sought by Copper, and also represents a significant decline from the high valuations seen in the previous round of the crypto market cycle. During the financing discussions in 2021, Copper sought to raise funds with a valuation of around $2.5 billion, with the peak valuation once exceeding $2 billion.
At present, neither Copper nor Cantor Fitzgerald has publicly confirmed the aforementioned valuation and quotation figures. Since no agreements have been signed yet, these figures are still in the negotiation phase and not the results of completed transactions.
Intensified competition in institutional custody tracks
Copper was established in 2018 and mainly provides digital asset custody, collateral management, and settlement services to institutional clients. Its ClearLoop network allows clients to complete settlements with connected trading platforms while the assets are still held by the custodian, thereby reducing the counterparty risk associated with the need to pre-transfer funds to the exchange.
Public information shows that Coinbase, Bitfinex, and Kraken are all on the client list of ClearLoop. As banks and native crypto companies both increase their investment in institutional custody services, competition in this field is intensifying. Coinbase Custody, BitGo, Fireblocks, etc., have already occupied the existing market, while traditional financial institutions such as BNY Mellon and Standard Chartered are also building or acquiring related infrastructure.
In this context, the customer network and over-the-counter settlement capabilities of Copper may become an important part of the potential buyers' evaluation. However, existing reports do not specify which assets the buyers value the most, nor do they explain why the bids have consistently been lower than the sellers' expectations.
The company is still in the process of strengthening its senior management team recently.
Kuchinad took over from CEO in October 2024. Prior to that, they held a position at Goldman Sachs and also served as an advisor to the U.S. Securities and Exchange Commission. The report does not indicate whether their departure was related to the sale process, valuation, operations, or regulatory matters.
Meanwhile, Copper has recently continued to strengthen its management team. The company has appointed Elin Cherry as the Chief Compliance Officer and Sean Bowen as the Chief Operating Officer. It has not yet been clarified whether these two individuals will take on additional responsibilities after CEO leaves their positions, nor has it been disclosed who is currently leading the negotiations with Cantor Fitzgerald.
As regulatory agencies in the United States continue to expand their digital asset custody services, the competitive pressure faced by independent custodian service providers is also increasing. For Copper, whether a sale can proceed will still depend on whether both buyers and sellers can narrow their valuation differences, as well as whether the company can clarify new management arrangements as soon as possible.
