Coinbase bought Xapo custodian service for $ 55 million

Coinbase bought Xapo custodian service for $ 55 million

The Coinbase cryptocurrency exchange acquired the custodial service of Xapo for $ 55 million, Fortune reports.

As a result of the transaction, Coinbase services can be used to store 5% of all bitcoins in circulation.

Coinbase now controls over $ 7 billion in cryptocurrency assets, a source familiar with the situation said. According to him, the investment company Fidelity also claimed the custodial service Xapo, but Coinbase made a more attractive offer.

Xapo will retain the exchange business; company founder Wences Casares will remain as CEO. He stated that servicing stock exchange transactions of retail customers has always been the main objective of Xapo:

“It is difficult to do business for consumers when it is also focused on institutional clients. This year we began to look for whom it can be passed on. ”

Casares also noted that other applicants did not have an adequate level of security or regulatory recommendations. These included, for example, Grayscale Investments, a digital asset management company.

According to sources, most of the major Xapo customers agreed to transfer their assets to Coinbase, to which more than 514 thousand bitcoins were transferred as a result.

Xapo’s remaining customer accounts are believed to have assets worth more than $ 3.5 billion. If Coinbase manages to attract them too, there will be over 860 thousand bitcoins in its vaults. Prior to the acquisition, Xapo Coinbase Custody held assets worth more than $ 1 billion.

Rumors about the possibility of a deal between Coinbase and Xapo appeared in May, but it took several months to resolve issues, including transferring client assets and determining the owner of the Xapo bunker in Switzerland.

Casares said that the bunker will remain with his company and will be used to store bitcoins for retail customers.

Crypto Bunker: Inside the Secret Bitcoin Vault in Switzerland

With the acquisition of the Xapo service, the number of Coinbase Custody customers has exceeded 150.

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