Fidelity’s crypto custody business records 60% loss in 2023

Crypto custodian service Fidelity Digital Assets recorded nearly a 60% drop in revenue per 2023, with losses soaring to more than £7 million.

Fidelity’s crypto custody business Fidelity Digital Assets launched in 2018 in a bid to expand its crypto services, generated revenue of £545,000 (~$695,000) over the past year, marking a 59% decline from £1.34 million for 2022, the Financial News reports, citing documents filed by Fidelity with Companies House.

In addition to decreased revenue, operating expenses also soared by 32% on a year-on-year basis to £7.8 million in 2023, driven largely by increased staff salaries, the report notes. In total, Fidelity Digital Assets saw a loss of £7.1 million for 2023, up nearly £5 million from £2.5m in 2022.

Addressing the losses, Fidelity says revenue is “forecasted to grow upwards with increasing business activity in[…] custody and trading services, as additional new clients are expected to be onboarded.” The decline in revenue is reportedly attributed to a drop in service-level agreement fees.

In early 2023, Fidelity lost its crypto chief Chris Tyrer, who led the company’s efforts in the crypto space since 2019 as head of Europe. In late May, Tyrer joined Bullish, a crypto exchange backed by Peter Thiel, as head of strategy.

In mid-May, crypto.news reported that Synnax, an artificial intelligence-powered financial platform designed for credit analysis and ratings, onboarded ex-Fidelity International head of digital assets Luc Froehlich as its new chief commercial officer to lead the firm’s commercial strategy and operations.