Zodia Custody Acquires Tungsten to Expand UAE Crypto Custody Footprint

·

The digital asset custody landscape in the Middle East is undergoing a significant transformation, as Zodia Custody finalizes its acquisition of Tungsten Custody Solutions, a prominent local player in the United Arab Emirates (UAE). This strategic move marks a pivotal step in Zodia’s mission to solidify its presence in one of the world’s fastest-growing crypto-regulated markets—specifically within the Abu Dhabi Global Market (ADGM) and the Dubai Virtual Asset Regulatory Authority (VARA) frameworks.

With the UAE positioning itself as a global hub for blockchain innovation and institutional-grade digital asset services, this acquisition enables Zodia Custody to accelerate its regional expansion, integrate established local infrastructure, and enhance compliance-ready offerings for institutional clients across the Gulf region.

Strengthening Regulatory Foundations in ADGM and VARA

Zodia Custody already operates under a financial services permission from ADGM’s Financial Services Regulatory Authority (FSRA), allowing it to provide regulated custodial services to institutional investors. By acquiring Tungsten, Zodia not only inherits an experienced local team familiar with UAE regulatory expectations but also gains momentum in Tungsten’s ongoing application for a full Virtual Asset Service Provider (VASP) license from VARA—the primary regulator overseeing crypto activities in Dubai.

👉 Discover how leading custody platforms are navigating complex regulatory environments.

This dual-market strategy—spanning both ADGM and Dubai—positions Zodia as a cross-jurisdictional powerhouse capable of serving clients throughout the UAE with tailored, compliant solutions. The integration of Tungsten’s regulatory progress with Zodia’s global standards promises a more seamless onboarding experience for asset managers, family offices, and fintech firms seeking secure access to Middle Eastern markets.

Strategic Rationale Behind the Acquisition

The decision to acquire Tungsten reflects broader trends in the institutional crypto space: consolidation among custody providers, increasing demand for localized compliance expertise, and the need for scalable infrastructure that meets both international security benchmarks and regional legal requirements.

Tungsten brought to the table deep relationships with local financial institutions, a proven understanding of UAE corporate governance, and a client-centric operational model—all of which complement Zodia’s technology-driven approach and global best practices. The combined entity will leverage advanced cryptographic key management systems, multi-layered cybersecurity protocols, and insurance-backed protection mechanisms to deliver enterprise-grade custody solutions.

Moreover, the acquisition allows Zodia to fast-track market penetration without starting from scratch. Instead of building regulatory pipelines independently, Zodia can now build upon Tungsten’s existing applications and stakeholder engagements, significantly reducing time-to-market for new services in Dubai.

Institutional Demand Driving Crypto Custody Growth in the UAE

In recent years, the UAE has emerged as a preferred destination for crypto-native firms and traditional financial institutions exploring blockchain-based assets. Favorable tax policies, forward-thinking regulation, and political stability have attracted billions in digital asset investments.

According to industry reports, over 500 virtual asset firms are now registered or licensed under either ADGM or VARA, with total crypto assets under management in the region projected to exceed $30 billion by 2026. This surge in institutional interest has created a pressing need for trusted, regulated custody solutions that can safeguard high-value holdings while ensuring full regulatory alignment.

Zodia’s expanded footprint directly addresses this demand. By combining global operational rigor with local market intelligence, the firm is well-positioned to serve sovereign wealth funds, private equity groups, and regulated exchanges looking to enter or scale within the region.

👉 Explore how next-generation custody platforms are securing institutional confidence in digital assets.

Focus on Security, Compliance, and Client Trust

At the heart of Zodia’s value proposition lies an uncompromising commitment to security and transparency. The platform employs military-grade encryption, air-gapped storage, and biometric access controls across its infrastructure. All custodial operations adhere to international standards such as ISO 27001 and SOC 2 Type II, ensuring resilience against cyber threats and operational risks.

Additionally, Zodia emphasizes regulatory transparency—regularly engaging with ADGM and VARA officials to ensure alignment with evolving compliance frameworks. Post-acquisition, the company plans to publish quarterly attestation reports verifying asset reserves and operational integrity, further reinforcing trust among clients and regulators alike.

Frequently Asked Questions (FAQ)

Q: What is the significance of Zodia Custody acquiring Tungsten?
A: The acquisition strengthens Zodia’s presence in the UAE by combining its global custody expertise with Tungsten’s local regulatory progress and market knowledge, enabling faster expansion across ADGM and Dubai’s VARA jurisdictions.

Q: Does Zodia Custody now hold a license from VARA?
A: While Zodia does not yet hold a full VARA license, the acquisition includes Tungsten’s ongoing application process. Zodia will continue advancing this effort to secure full VASP authorization in Dubai.

Q: How does this acquisition benefit institutional investors?
A: Investors gain access to a more robust, locally integrated custody solution that meets strict UAE regulations while maintaining international security standards—reducing counterparty risk and simplifying cross-border asset management.

Q: Is Zodia Custody expanding beyond the UAE?
A: While the current focus is on deepening its Middle East footprint, Zodia has expressed intentions to explore opportunities in other regulated markets, including Asia-Pacific and Europe, leveraging lessons from its UAE integration.

Q: What security measures does Zodia use to protect digital assets?
A: Zodia utilizes cold storage with multi-signature wallets, hardware security modules (HSMs), biometric authentication, and comprehensive audit trails. Its systems are regularly tested by third-party cybersecurity firms.

Looking Ahead: A Unified Vision for Institutional Crypto Adoption

As the lines between traditional finance and digital assets continue to blur, secure and compliant custody remains a cornerstone of mainstream adoption. Zodia’s acquisition of Tungsten is more than a business expansion—it’s a statement of confidence in the UAE’s long-term role as a global crypto hub.

By merging global best practices with regional expertise, Zodia is setting a new benchmark for what institutional-grade custody should look like in emerging markets. The company aims to become the provider of choice for organizations seeking reliable, scalable, and regulation-compliant infrastructure in one of the most dynamic fintech ecosystems today.

👉 Learn how top-tier custody solutions are shaping the future of institutional crypto adoption.

With strong regulatory tailwinds and rising investor appetite, the stage is set for continued innovation—and Zodia Custody is positioning itself at the forefront.

Core Keywords: