BitGo Defies Crypto Turmoil: Secures $100M Funding for Custody Services

The cryptocurrency custody company, BitGo has defied all odds to raise a substantial $100 million in a funding round, attaining a valuation of USD $1.75 billion. The funding arrived at a time the cryptocurrency sector has been marked by uncertainty, regulatory debates, and market volatility.

Regulatory Safety

According to a report by Bloomberg, the company’s CEO, Mike Belshe, acknowledged the challenging market conditions but attributed BitGo's success to its adherence to licensing and regulations, which has reportedly enabled the company to defy the uncertain legal environment that has been facing digital assets.

The Palo Alto-based company’s funding was secured exclusively from new investors. Although Belshe kept the details of the investors under wraps, he revealed that they hail from both the US and Asia, with some being individuals from beyond the crypto realm.

BitGo’s latest funding round not only strengthens its valuations but reportedly paves the way for potential acquisitions. Belshe told Bloomberg that the company had already initiated discussions for at least two potential deals. This comes after BitGo’s decision to abandon its plans to acquire Prime Trust, a rival crypto custodian, which filed for bankruptcy this week.

The current valuation of BitGo is much higher than the valuation of the firm of USD 1.2 billion in 2021 when Galaxy Digital unsuccessfully tried to acquire the company. The unsuccessful acquisition resulted in a lawsuit that revolved around BitGo’s claims of a prematurely terminated acquisition agreement.

Failed Acquisitions Plans

In light of the matter, the court concluded that Galaxy’s decision was warranted due to BitGo’s failure to provide timely audited financial statements during the due diligence phase. Consequently, Galaxy Digital was absolved of any liability regarding a termination clause BitGo based its argument.

In June, Finance Magnates reported that BitGo has opted to abandon its intended acquisition of Prime Trust, despite a preliminary agreement reached between the two companies. This decision came amid a backdrop of uncertainty and speculations surrounding the financial health of Prime Trust.

The now-bankrupt Prime Trust’s operations had been fraught with ups and downs, including the termination of its application for a Texas Money Transmitter license and the subsequent withdrawal of its services from Texas. Additionally, the company’s subsidiary, Banq, filed for bankruptcy in June.