Coinbase, major US-based cryptocurrency, and digital asset exchange is purportedly negotiating the acquisition of the bitcoin custody business of cryptocurrency wallet provider Xapo. The development is first reported by crypto media outlet the Block on May 16.
Sources familiar with the matter allegedly told the Block that the crypto exchange has been vying with the virtual asset wing of United States financial services major Fidelity and Fidelity Digital Assets for Xapo over past quite a few weeks to advance its crypto custody business.
Coinbase will supposedly pay about $50 million in cash to Xapo, subsequent to the closure of the deal. Moreover, there will be a conditional earn-out for outstanding with the company.
It is to be noted that Xapo was founded in 2014. It is a Hong Kong-based startup that provides cold storage vault and a bitcoin wallet. It also provides bitcoin-based debit card services. Interestingly, the startup is backed by leading industry players such as VC firms Index Ventures and Greylock Partners, crypto investment companies Blockchain Capital, Digital Currency Group, and Winklevoss Capital and. Xapo supposedly holds $5.5 billion in assets under custody.
Several media outlets reported earlier this month, that Coinbase CEO Brian Armstrong mentioned that Coinbase Custody managed to get $1 billion in AUM in just twelve months after its launch. He further added that seventy institutions signed up to the service during that period.
It is to be noted that Coinbase, this week, made a massive expansion of USDC trading to customers in eighty-five countries. Along with the USD Coin announcement, Coinbase also divulged a key global expansion, adding fifty more jurisdictions to its coverage, including countries like Taiwan, Brazil, South Africa and among others.