Nomura Holdings said it will strengthen risk management for its cryptocurrency arm, Laser Digital, after losses from the business contributed to a 9.7% decline in the company's third-quarter profit, Bloomberg reported.
During Friday's results briefing, Nomura CEO Hiroyuki Moriuchi said the company had implemented stricter position management to reduce risk exposure and limit earnings fluctuations due to fluctuations in the cryptocurrency market.
On October 10, four days after Bitcoin hit an all-time high of more than $126,200, the cryptocurrency market suffered a flash crash that wiped out more than $19 billion in leveraged positions in the largest deleveraging event in industry history. Bitcoin ended the year at about $87,000, about 31% below its October high, and the cryptocurrency's market capitalization fell from about $4.3 trillion to just over $3 trillion by the end of the year, according to data from Coingecko.
“There seems to be a vague sense of uncertainty about the overall direction of the market, which combined with the surprise on the crypto side, has triggered a sell-off,” said Hideyasu Ban, senior analyst at Bloomberg Intelligence, adding that this was likely just a short-term market reaction.
Nomura's net income fell to $590 million in the three months ended Dec. 31, the holding company announced Friday.
Just three days before Moriuchi announced the reduction of his company's crypto exposure, Laser Digital announced that its Americas division had filed a new application with the Office of the Comptroller of the Currency (OCC) to form a national trust bank that would join multiple crypto companies seeking to provide asset management services for the digital asset industry.
