According to Bloomberg, Nomura Holdings said it will strengthen risk controls at its cryptocurrency unit Laser Digital as business losses led to a 9.7% drop in third-quarter profit.
During an earnings call on Friday, Nomura CEO Hiroyuki Moriuchi said the company implemented tighter position management to reduce risk exposure and limit earnings swings from cryptocurrency market swings.
On October 10, four days after Bitcoin hit an all-time high of over $126,200, the cryptocurrency market suffered a flash crash that wiped out more than $19 billion in leveraged positions, the largest deleveraging event in the industry’s history. According to data from Coingecko, Bitcoin ended the year at about $87,000, about 31% lower than its peak in October, and the total cryptocurrency market value fell from about $4.3 trillion to just over $3 trillion at the end of the year.
“There is a vague sense of uneasiness about the overall market direction, which appears to be combining with unexpected events in the cryptocurrency space to trigger the sell-off,” said Hideyasu Ban, a senior analyst at Bloomberg Intelligence. He added that this may only be a short-term market reaction.
Nomura Holdings Inc said on Friday its net profit fell to $590 million in the three months ended Dec. 31.
Just three days before Moriochi’s announcement to reduce the company’s cryptocurrency exposure, Laser Digital said its Americas division submitted a re-application to the Office of the Comptroller of the Currency (OCC) to establish a national trust bank, joining several cryptocurrency companies seeking to provide asset management services to the digital asset industry.
