Investment banking giant Goldman Sachs and Galaxy Digital, the crypto merchant bank set up by former Wall Street banker Mike Novogratz, are among the investors participating in BitGo’s series B funding round.
BitGo is a California-based blockchain security company, which in mid-2014 became the first company to commercialize multi-signature cryptocurrency wallets.
According to the Bloomberg report, BitGo brought in a total of USD 58.5 million in the funding round, out of which the two firms together invested USD 15 million. The report further noted that securing investments from high-profile financial firms like Goldman Sachs may help the crypto security startup attract more wealthy individuals and financial institutions as clients.
According to Mike Novogratz, the move represents yet another step on the way to develop the architecture needed for institutions to fully embrace crypto:
In the United States, money managers are required to turn assets over to third party custodians for security reasons. The same applies to institutions that are managing large amounts of money in the form of digital assets, which explains why Wall Street is so keen on getting more trusted custodians into this market.
Explaining why custody is such an important issue to large crypto investors in particular, BitGo’s co-founder and CEO Mike Belshe said “If you were investing in any other asset class, you’re probably not worried about the asset just disappearing – but this one, people still have that fear,” adding “we’ve got to conquer that.”
Despite investing in BitGo, Mike Novogratz and Galaxy Digital are already working with other companies on crypto custody services. As Cryptonews.com reported earlier this week, Galaxy Digital will be the “alpha crypto custody client” for Fidelity’s newly announced crypto initiative, Fidelity Digital Assets, a full-service digital assets platform for financial institutions.
With USD 7.2 trillion of assets under management, Fidelity is the fourth largest asset manager in the world. It has been operating in the financial services industry since 1946.