(Bloomberg) -- Hedge fund manager Steven Tananbaum’s GoldenTree Asset Management has sold its crypto subsidiary to digital-asset investment firm Republic.

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Joe Naggar, a former partner at GoldenTree, will join Republic Digital, a newly created entity under Republic, as chief executive officer and chief investment officer. The acquisition of GoldenChain, a wholly owned subsidiary of GoldenTree, was completed in the last week, Naggar said. He declined to disclose the terms of the deal, citing confidentiality.

“The acquisition is not changing the fund at all, it’s actually just changing the ownership,” Naggar said in an interview.

GoldenTree’s launch of a digital-asset subsidiary in 2022 was championed by the crypto industry as evidence that Wall Street institutions were committed to the sector. In September 2023, however, GoldenTree made the decision that a crypto fund was not a “great fit” for an asset manager focused on credit and distressed markets, especially with “a lot of regulatory and reputational issues” within the digital-asset industry, according to Naggar.

“GoldenTree has been a great partner throughout the process, but really decided that it wasn’t appropriate,” Naggar said. “We decided that we would spin the business out some way shape or form.”

At the time, GoldenChain’s trading desk was managing assets worth between $120 million and $150 million, Naggar said. Under the new ownership, Republic Digital also plans to expand its fund strategies, he added.

Andrew Durgee, president of Republic, said that the firm at the time was looking to expand its liquid token strategy, when Naggar reached out to him about GoldenChain. The deal was ideal, especially because Republic Crypto is already a portfolio company of GoldenTree, he said.

New York-headquartered Republic is a global investment firm focusing on the digital-asset industry. It has more than 2,000 companies in its portfolio.

Naggar added that GoldenTree’s divestiture is not a “negative” of the theme “institutions are coming.”

Six other GoldenChain employees will join Republic with Naggar. Avi Felman, head of digital assets trading at GoldenTree, left GoldenChain, but will not join Republic.

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