Komainu CEO eyes deals to push beyond custody amid crypto M&A boom

Paul Frost Smith said he wants to make a deal — or several.

The CEO of Komainu, a crypto custodian, said he’s looking to scoop up crypto companies across the world to either get a foothold in new regions or to open up additional business lines.

And there’s plenty of opportunities to go around as crypto downshifts into its richest bull market since 2021.

“The industry is in a state now where nearly everything is for sale. I’ve never seen anything quite like it,” Frost Smith told DL News in a wide-ranging interview.

Komainu’s goal? To “become the dominant digital asset service provider outside of the US,” Frost Smith said.

That’s a tall order.

$75 million raise

While Komainu says it has “well over $10 billion” assets in custody and bagged $75 million in a Series B raise in January, it isn’t the only bank-backed custodian offering its services to international institutional clients like banks and governments.

Rivals such as Zodia Custody are similar in size, and also have offices in many of the same regions that Komainu is targeting.

Komainu declined to provide a valuation.

Acquisitions appear to be a key piece of both companies’ growth strategy.

In October, Komainu agreed to acquire Propine Holdings, a Singapore based crypto custodian. In May, Zodia Custody announced plans to buy Tungsten Custody, a Dubai-based firm.

‘There’s an awful lot of concentration risk in Coinbase at the moment.’

Paul Frost Smith

Frost Smith declined to offer details about how much Komainu is willing to spend on acquisitions or how it plans to fund them. He said that, apart from tapping into the funds provided in the January raise, it has access to “other funding if needed.”

It’s not just crypto custodians that are looking to make deals — the entire crypto industry is in a state of consolidation.

In May, Messari estimated that there had been almost 120 mergers and acquisitions worth about $8 billion in 2025, which means crypto M&As are set to hit levels not seen since 2021.

Firms like Stripe, Coinbase, Ripple, Robinhood, and Kraken are among the bigger players to have bought smaller startups this year.

What’s Komainu’s deal?

Komainu first launched in 2018 as a joint venture by Nomura, the Japanese financial services group; CoinShares, the digital asset firm; and Ledger, the crypto hardware developer.

Komainu is named after the mythical lion-dog statues that guard Shinto temples.

Komainu’s team of roughly 70 employees are spread across its headquarters in Jersey, one of the Channel Islands, and offices in the US, Singapore, and Dubai. It is also opening an office in Italy.

In Asia, Komainu is looking to be fully operational in Singapore and Japan over the next six to nine months, the company’s CEO said.

Frost Smith said he expects his staff to increase to about 120 people by the end of the year — which would bring it in line with Zodia Custody’s staff numbers.

US opportunity

Frost Smith is bullish about the US.

Since Donald Trump was elected president, the country has grown more welcoming for crypto firms. That’s created an opportunity for Custodians like Komainu.

“There’s an awful lot of concentration risk in Coinbase at the moment,” he said, noting that eight of nine US Bitcoin exchange-traded fund issuers custody with the crypto exchange.

“There are very good arguments to say that that custody base should be split among several custodians [to spread the risk,]’ Frost Smith said.

A company spokesperson added: “Komainu sees its main competition coming from the US and is taking steps to ensure it is the go-to provider outside the US.”

Even so, the main priority for Komainu is to expand its business in Asia.

Komainu is also toiling to get licensed under the European Union’s new Markets in Crypto-Assets, or MiCA, regime.

“It’s less of an important market for us than Asia,” Frost Smith said, adding that the firm doesn’t want to lose the few European clients that it has, which is why Komainu is pursuing the licence.

Withdrawing from the UK

Across the English Channel, the UK government has signalled a move to introduce new crypto-specific laws and regulations.

CryptoUK, the industry body, has welcomed this push, even though those rules will require crypto companies to ramp up background checks on users to avoid being used for money laundering or other financial crimes.

More oversight may run counter to the prized tenets of financial privacy at the heart of crypto.

Even so, Komainu registered with the Financial Conduct Authority, the UK’s key financial markets regulator in 2023. Frost Smith warned that the firm may leave the UK if the FCA’s new proposed rules prove too costly.

“We would consider withdrawing from the UK,” Frost Smith said, noting that no decision one way or another has been made.

“The regulators here need to be a little bit careful that they don’t make things so different and so onerous that they force sensible, conservative operators like ourselves out of the market,” he added.

Eric Johansson is DL News’ managing editor. Got a tip? Email at eric@dlnews.com.