BitGo acquires Harbor in a surprise expansion beyond crypto custody
BitGo is expanding beyond crypto custody with the acquisition of a secondary child from the adjacent market for digital securities.
The crypto custodian announced on Tuesday the acquisition of Harbor, a security token platform best known for a failed offer to offer symbolic shares of an apartment building (offer tokenized shares) in South Carolina.
Harbor subsidiaries, which include a stockbroker regulated by the Financial Industry Regulatory Authority and a transfer agent supervised by the Securities and Exchange Commission, are included in the acquisition, the companies said. The measure allows BitGo to expand its services from custody, becoming what CEO Mike Belshe said is the first full-stack service provider in the digital securities space. Terms of the deal were not disclosed.
The acquisition essentially allows BitGo to recreate all parts of the traditional financial system, Belshe said, noting that BitGo is an authorized custodian through the South Dakota Banking Division.
Similarly, Belshe reported. “As we build the market infrastructure for cryptography, there are many pieces to assemble. At the end of the day, the existing market has this great advantage by having built its structure for decades and we are trying to replicate that in a short period of time. “.
The acquisition marks the first time that a single entity in the cryptocurrency space is licensed by the broker, transfer agent and a qualified custodian, said Belshe (FINRA and the SEC must approve the transfers of the broker and transfer agent to BitGo, a process that Belshe said is already underway).
Qualified custodians can store securities on behalf of clients, including institutions; stockbrokers can trade these securities for themselves or for clients; and transfer agents act as intermediaries that help register transactions, among other duties.
While Belshe did not say how much the company has in assets under management, he said that BitGo carries out transactions for around $ 15 billion every month, including through its international clients.
The firm will add Harbor products and services under the acquisition, although an exact roadmap has not yet been finalized.
Port of call
The sale marks a turning point for Harbor, which originally set out to help other companies issue security tokens before focusing on facilitating the tokenization of existing securities. In September 2019, the company created ethereum tokens representing shares of four different real estate funds, for a total of about $ 100 million.
The company obtained its stockbroker license and transfer agent registration last fall
“One piece that we have lost is custody. We have partnered with BitGo and, therefore, when you are under the same roof, things become possible, you make things more integrated than before, we are exploring that now with BitGo, we are trying to find out exactly what the roadmap that seems to be glimpsed, “said Josh Stein, CEO of Harbor.
While Stein also joins BitGo, its exact role has not yet been defined.
BitGo plans to expand the amount of assets it supports, particularly with security tokens, but Belshe said he could not specify which tokens this could include, citing regulatory ambiguity.
“We are significantly lowering the entry barrier by uniting all these things,” Belshe said. “This gives us full capabilities around the issuance, marketing and transfer of security tokens.”
The Blockchain-bitcoin technology is so wide and with great possibilities of success that a single company cannot provide all the services to the users, for that reason, the purchases, mergers, between the different companies are seen. expected by new ads
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