Coinbase Custody, the custodial wing of the US-based crypto exchange by the same name, on Friday announced that it acquired the institutional business of Xapo.
Although the exchange did not post figures in the official announcement, the deal was sealed at $55 million, according to Fortune.
Coinbase was competing with Fidelity to acquire the Swiss Bitcoin custodial company for months. The confirmation of the deal has given the exchange a massive push for its global expansion.
Offering end-to-end crypto service to institutions
With this, Coinbase now has $7 billion in digital assets under custody.
Xapo is one of the oldest Bitcoin custodial services on the globe. Last year, the company gained BitLicense from the New York Department of Financial Services (NYDFS), to operate a crypto exchange in the state.
Fortune also detailed that the majority of Xapo’s clients agreed to transfer their assets to the Coinbase Custody, which will put more than 514,000 Bitcoins in the exchange’s vault. There are still some major clients who hold combined assets worth $3.5 billion. If they also move their digital assets to the custodial of the San Francisco-headquartered exchange, it will hold over 860,000 Bitcoins.
Coinbase also revealed that it has more than 120 clients for its custodial business who are spread across 14 countries.
Despite the $55 million acquisition deal, Xapo will retain a few of its businesses including its retail exchange and its Switzerland-based Bitcoin vault.
“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,” Brian Armstrong, chief executive of Coinbase, told Fortune.
Meanwhile, in the United Kingdom, Coinbase is facing serious issues with its banking partners. Two major banks – Barclays and Santander UK – cut ties with the exchange, which in the process lost its access to Faster Payments Scheme (FPS) for fiat settlements.