The acquisition adds to Coinbase’s growing custody business, which stores over $7 billion in assets.
Cryptocurrency exchange Coinbase has completed the acquisition of Xapo's custody business in a deal reportedly worth $55 million. Coinbase announced this acquisition on August 15, 2019, noting that the acquisition will help prop up Coinbase Custody, which has over $7 billion worth of assets stored for more than 120 clients.
Xapo is a Hong Kong-based company that provides bitcoin cold wallet storage services. As of May 2019, it had close to $10 billion worth of bitcoin stored in underground vaults, according to Bloomberg.
Fortune reported that the exchange had some stern competition from crypto asset management firm Fidelity in its bid for Xapo’s institutional businesses, but ultimately it was able to edge out the competition.
The Fortune report also included a quote from Coinbase Chief Executive Sam McIngvale, who revealed the company's intention to expand into the cryptocurrency lending business. He added that it would be looking to help investors earn a profit on bitcoin lending, and that the Xapo deal could be significant in bringing that mission to life.