Coinbase buys Xapo Custody for $55M, may soon store 5% of all BTC

posted 12 months ago
Cryptocurrency firm Coinbase acquired the custody business of Xapo, a service best known for storing Bitcoins in a vault under a Swiss mountain. And could result in the San Francisco company storing over 5% of all Bitcoins in circulation(860,000 BTC). Coinbase paid $55 million for Xapo and, now has a reported $7 billion in crypto assets under management. The purchase came after Coinbase outbid investment giant Fidelity.

Coinbase reportedly has elaborate security measures, including systems to store private keys—which unlock Bitcoin wallets—in secret locations in various cities. Coinbase is betting that building a secure storage system that meets regulatory requirements will lure investors that have till now been wary of adding crypto to their portfolios. CEO Brian Armstrong said "Custody is a critical step toward the institutionalization of crypto economy. It’s likely to start off small—maybe a few billion under custody—but it will grow quickly to a point that it’s a meaningful piece of stable, recurring revenue for the company." Coinbase Custody’s customers’ assets are fully backed by an insurance syndicate led by Lloyd’s of London.
Tags: blockchain, bitcoin, news