Nomura Holdings said it will tighten risk controls at Laser Digital, its crypto unit, after losses in the business contributed to a 9.7% drop in the company’s fiscal third-quarter profit, Bloomberg reported.
During an earnings briefing on Friday, Nomura CEO Hiroyuki Moriuchi said the company implemented stricter position management to reduce risk exposure and limit profit fluctuations due to changes in the cryptocurrency market.
On October 10, four days after Bitcoin hit a record high of over $126,200, the cryptocurrency market suffered a flash crash resulting in the elimination of over $19 billion in leveraged positions in the largest deleveraging event in the history of the industry. Bitcoin ended the year around $87,000, about 31% below its October peak, and the total crypto 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 is a vague sense of unease about the overall direction of the market, and that seems to have combined with the surprise on the cryptocurrency front to trigger the selling,” said Hideyasu Ban, senior analyst at Bloomberg Intelligence, adding that it is likely just a short-term market reaction.
Nomura’s net income fell to $590 million in the three months ended Dec. 31, the holding firm said on Friday.
Just three days before Moriouchi announced the reduction of his company’s crypto risk, Laser Digital said its Americas division filed a de novo application with the US Office of the Comptroller of the Currency (OCC) to establish a national trust bank, joining several crypto companies seeking to offer asset management services for the digital asset industry.
