The increase in cryptocurrency transactions all over the world has opened doors to opportunities for old and new businesses alike, and the most recent news is related to this very notion.
The move follows BitGo’s recent funding round in December 2017 in which the company raised around $42 million.
Details about the companies
BitGo is a blockchain based cryptocurrency custodian for corporations and institutions that secure their digital assets with the company.
The company is reported to facilitate over $10 billion in transactions per month for its clients. It entered into a partnership with Kingdom Trust almost two years ago, which led to this recent acquisition of Kingdom Trust and Kingdom Services.
Kingdom Trust, a South Dakota based trust company, is a certified and fully regulated entity that currently holds over $12 billion in assets under its custody. It has been a 40 Act qualified custodian since around a decade.
Through their combined operations, both companies aim to establish themselves as industry leaders of custodial services. BitGo brings its technology, experience and cryptocurrency based client portfolio on board to match with Kingdom Trust’s compliance capabilities.
Speaking about the venture, BitGo’s CEO, Mike Belshe, stated that together, the companies’ combined capabilities would ensure to set BitGo as the industry leader.
“Global financial markets have longed for an end-to-end solution offering both the technology to secure digital currencies as well as the legal and compliance controls necessary to integrate into mainstream financial portfolios.”
He further mentioned that the combination of both companies is the answer to investors’ requirements.
“Both companies are working toward safety of money and assets. BitGo and Kingdom are building products for the future – marrying the new technology with the safety and controls all investors require.”
The acquisition is subject to regulatory approvals and closing conditions.
Strengthened security is a non-negotiable requirement
With the repeated hacking attempts on cryptocurrency exchanges and other companies related to the industry, it seems that the requirement for custodians such as BitGo is inevitable.
While decentralized exchanges are in the works which will help in ensuring that customers’ assets are save with the relevant entity, custodian services that could guarantee security while also providing risk management could be the solution that most companies might be looking towards at the moment.
If the acquisition goes through, then it would prove to be beneficial for BitGo and might help it grow and evolve into a more significant and more extensive operation with a few years’ time.