Galaxy Digital in advanced talks to buy BitGo

Michael Novogratz’s cryptocurrency-focused financial services company Galaxy Digital is said to be in advanced talks to buy BitGo, a U.S.-regulated crypto custody specialist.

The information is reported by CoinDesk to come from four people that are familiar with the situation, although both Galaxy Digital and BitGo refused to comment and issued an official statement regarding the matter.

Last year, the crypto custodial group was also reported to be in acquisition talks with PayPal, which offered as much as $750 million for the company. No deal was struck, and PayPal ended up acquiring Curv, another cryptocurrency custody firm.

Layers of secrecy

In its post, CoinDesk said that one of the sources familiar with the matter told them that “Galaxy does not do custody so it makes sense to bring that in-house.” Aside from that, BitGo also manages WBTC, an $8.5 billion valued service that wraps Bitcoin into Ethereum-compatible tokens.

At this stage, the details of the deal remain unclear, but one of the four sources said that there might be a traditional financial firm alongside Galaxy Digital.

Activities involving custody firms have been increasing following the buoyancy of cryptocurrencies since last year. These firms are key components in institutionalizing digital asset trading.

At the crosshairs

BitGo is under the radar of a Goldman Sachs wealth fund that will offer Bitcoin (BTC) to high-net-worth investors. Goldman and Galaxy are both investors in BitGo.

Galaxy Digital is part of the NYDIG crypto trading consortium together with Wall Street bigwig Morgan Stanley. NYDIG has raised $300 million since March as an emerging player among institutional Bitcoin buyers.

BitGo raised nearly $70 million in six funding rounds, and it included investments from Galaxy Digital.

Whether the pushes through or ends up just like the PayPal case remains to be seen, and with both camps choosing to be quiet about it, the only option is to wait and see.

 

Image courtesy of InvestAnswer/YouTube

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