The custodial division of the largest US cryptocurrency company Coinbase has confirmed the purchase of the Xapo service. The deal is estimated at $ 55 million.
1 / Today, Coinbase Custody has completed an acquisition of Xapo's institutional businesses. With over $ 7 billion in assets, we're now the most popular place for institutions to store cryptocurrency. Read more here https://t.co/bL3oj1Pyfl
– Coinbase Custody (@CoinbaseCustody) August 16, 2019
So, at the moment, Coinbase Custody stores digital assets worth more than $ 7 billion from 120 institutional clients from 14 countries. This makes the company the largest institutional custodian in the industry.
2 / At just over 1-year old, Coinbase Custody has grown to over $ 7 billion in Assets Under Custody (AUC) from over 100 clients in 14 different countries. pic.twitter.com/VvK6b0sTQs
– Coinbase Custody (@CoinbaseCustody) August 16, 2019
According to media reports , most Xapo customers agreed to transfer their assets to Coinbase – about 514,000 BTC, but some have not yet decided. If the company succeeds in convincing the others, then Coinbase Custody will have about 4% of the total issue of bitcoin.
It is noteworthy that recently the custodian BitGo joined the fight for Xapo customers, whose representatives promised the institutions a free 12-month depositary service.
Special offer: through 9/30 qualifying clients can custody their assets with BitGo with no custody fees for 12 months. Contact [email protected] for details.
– BitGo (@BitGo) August 14, 2019
It should be emphasized that Xapo will retain control over the retail business and the bunker in Switzerland, and this is about buying an institutional unit.
According to Coinbase CEO Brian Armstrong, weekly Coinbase Custody accepts new deposits of $ 200- $ 400 million.
Whether institutions were going to adopt crypto or not was an open question about 12 months ago. I think it's safe to say we now know the answer. We're seeing $ 200-400M a week in new crypto deposits come in from institutional customers.
– Brian Armstrong (@brian_armstrong) August 16, 2019
“A year ago, the question of whether the institutional is going to invest in cryptocurrencies remained open. I think that now we know the right answer. "
Recall that negotiations between the companies became known back in May. Then the potential deal was estimated at $ 50 million.
Startup Xapo was created in 2014 and was one of the first to offer simple and convenient bitcoin wallets. Its founder, Vinces Casares, is credited with popularizing Bitcoin among Silicon Valley executives.
The company also acquired a decommissioned military bunker dug in a granite mountain near the eastern shore of Lake Lucerne, where it housed one of the largest and most protected bitcoin repositories. At some point on the Xapo servers in the bunker there could be 7% of all existing bitcoins.
Quartz revealed the secret #Xapo bitcoin depository in the mountains of Switzerland https://t.co/2wslvFHcOv pic.twitter.com/ZtdzRDnxKG
– BlockchainJournal (@BlockchainJournal) October 18, 2017
Note that the Coinbase Custody division has been operating for a little over one year, and in May the value of assets in its vaults reached $ 1 billion.
Earlier, investment company Grayscale Investments announced the transfer of customer assets of $ 2.7 billion from Xapo to Coinbase Custody.
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