WisdomTree's NY Crypto App Launch Amid Shareholder Rift

Key Takeaway

• WisdomTree's digital asset app goes live in New York, offering access to BTC, ETH, and more despite shareholder opposition.
• CEO under pressure as major shareholder criticizes the firm's DeFi push as a "massive distraction."
• Despite being a TradFi player in crypto since 2019, its spot bitcoin ETF sees minimal inflows of $70 million compared to competitors.

WisdomTree Expands Digital Asset App to New York

WisdomTree, a notable player in the traditional finance (TradFi) sector, has made significant strides in the digital asset space with the expansion of its digital asset app, WisdomTree Prime, to New York. This move comes after the app's initial launch in 21 states in July and follows the receipt of a charter to operate as a limited-purpose trust company under New York Banking law in March. WisdomTree Prime offers users a platform to save, spend, and invest in digital assets like bitcoin (BTC) and Ethereum's ether (ETH), alongside dollar and gold tokens, utilizing the Stellar and Ethereum blockchains for on-chain ownership records. Will Peck, head of digital assets at WisdomTree, highlighted the app's strong momentum since its summer debut, emphasizing new digital fund launches, enhanced payment capabilities, and successful collaboration with regulators.

Shareholder Tensions Over DeFi Push

Despite the advancements in digital assets, WisdomTree's CEO, Jonathan Steinberg, faces opposition from the firm's largest shareholder, Graham Tuckwell, chair of ETFS Capital. Tuckwell has expressed dissatisfaction with WisdomTree's aggressive push into decentralized finance (DeFi), urging investors to vote against Steinberg's reappointment. Tuckwell's discontent stems from what he perceives as a "massive distraction and utterly unsuccessful" venture into DeFi by Steinberg. This internal conflict comes after Tuckwell became a significant shareholder in 2018, following WisdomTree's acquisition of the European arm of ETF Securities, which Tuckwell founded.

WisdomTree's Crypto Market Presence

Since 2019, WisdomTree has established itself as a dominant force in the crypto segment of TradFi, launching its first bitcoin exchange-traded product on the Swiss stock exchange SIX. Further solidifying its position in the market, WisdomTree became one of the ten issuers of a spot bitcoin ETF in the U.S. in January of this year. However, the fund has experienced challenges in attracting significant inflows, garnering around $70 million, which is considerably less compared to other issuers who have collected billions of dollars from investors.

Management Quotes

• Will Peck, Head of Digital Assets at WisdomTree:

  "Since we first entered app stores in select states last summer, we have exhibited strong momentum across all fronts, including new digital fund launches, payment capabilities, and collaboration with regulators."

• Jonathan Steinberg, CEO of WisdomTree (implied through report):

  The Financial Times reported that the firm's biggest shareholder does not agree with the firm's strong push into DeFi and has urged investors to vote against the reappointment of Steinberg.