(Bloomberg) -- Deutsche Bank AG’s asset management arm is in talks to invest in two German cryptocurrency firms as part of efforts to revive growth, according to people familiar with the matter.

DWS Group, led by Chief Executive Officer Stefan Hoops, has held talks about buying a minority stake in Deutsche Digital Assets, a Frankfurt-based provider of crypto exchange-traded products, the people said, declining to be named discussing private information. Another potential target is Tradias, the market-making firm owned by Bankhaus Scheich, they said. 

The asset manager has also held talks about potential ways of collaborating with Galaxy Digital, the firm run by Mike Novogratz, the people said. 

Hoops, who is trying to restore DWS’s reputation after allegations of greenwashing resulted in probes by US and German authorities, would be wading into a sector marred by a series of recent governance scandals — including the collapse of crypto exchange FTX in November. Hoops has been a vocal advocate of new technologies and in December outlined a strategy around using blockchain and digital currencies.

DWS isn’t the only firm with roots in traditional finance that’s mulling expansion in the digital-assets space. Companies from Bank of New York Mellon Corp. to BlackRock Inc. are making forays into crypto, betting the industry will provide lucrative opportunities as it matures. 

Wall Street Giants Spy Opportunities Rising From FTX Ashes

Tradias, which counts German brokerage firm Trade Republic among its clients, was tapped by Frankfurt prosecutors in late 2021 to sell confiscated cryptocurrency in a way that created minimum volatility. Like with DDA, discussions to invest in Tradias center on buying a minority stake, the people said.  

Representatives for DWS, Tradias and Galaxy declined to comment. DDA had no immediate comment. 

Reviving growth and investor confidence is one of the main tasks for DWS, which reported outflows of nearly €20 billion ($21.5 billion) for 2022 and a €107 billion drop in managed assets, as markets sank worldwide.  

Hoops said during an earnings call last week that DWS has “started to assess strategic partners and commence due diligence on potential targets” in areas where it wants to develop new capabilities, such as digital assets. He said the recent drop in digital asset prices could yield “interesting opportunities” for DWS.

--With assistance from Stephan Kahl.

(Adds Galaxy talks in third paragraph.)

©2023 Bloomberg L.P.