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Crypto asset management firms, Arca and BlockTower, have signed a letter of intent to merge in an all-equity deal, aiming to strengthen their position in the increasingly competitive cryptocurrency investment sector.
The proposed merger would consolidate most operations under a single brand, though BlockTower Venture Capital will maintain independent operations, the companies announced today. Both firms are registered investment advisers regulated by the Securities and Exchange Commission (SEC).
Jeff Dorman, CFA, Co-Founder and Chief Investment Officer at Arca, said: "We expect to see ongoing consolidation, the emergence of new investment vehicles, and unique investment opportunities that differ from anything currently available in finance. Ari and I share a common background as experienced Wall Street professionals and have built and managed funds over the past seven years. Additionally, BlockTower's team complements Arca's skillset, which will be essential to navigate and capitalize on these new opportunities effectively."
BlockTower's Co-Founder and Chief Investment Officer, Ari Paul, highlighted talent acquisition as a key driver for the merger: "Competing in the maturing digital assets space and serving our investors requires a constant fight for top talent. By merging with Arca, we're excited to create a stronger investment team immediately. Arca is an excellent match for BlockTower because we share similar investment principles, values, and long-term vision for successful asset management in the digital assets space. Our alignment includes a commitment to operational excellence, a foremost emphasis on our fiduciary role and the duties accompanying it, and setting a high ethical bar in treating all stakeholders."
Arca CEO Rayne Steinberg said: "Investors have been clamoring for regulated digital assets investment offerings for years. By uniting our teams, we believe we will possess the resources and expertise to effectively manage our current product offerings and broaden our investment options, enabling investors worldwide to access digital assets through institutional-calibre products."
Los Angeles-based Arca, established in 2018, comprises Arca Investments and an innovation division, Arca Labs. BlockTower, founded in 2017 by former Goldman Sachs and University of Chicago Endowment executives, operates from Miami and New York, managing various cryptocurrency and blockchain technology investments across public and private markets.
Financial terms of the proposed merger were not disclosed.
