- Goldman Sachs and Novogratz have contributed a sum of $15 million into the startup, BitGo Holdings.
- “We believe that a custody offering is a logical precursor to digital asset market making,” Goldman Sachs spokesperson.
The financial guru, Goldman Sachs is joining hands with its former partner, billionaire Mike Novogratz and together they will invest in a crypto venture. BitGo Holdings Inc. is a cryptocurrency startup that is offering digital asset custodian services. Goldman Sachs has in the recent past been pushed towards the idea of cryptocurrency services due to the growing interest from its clients.
Both the bank and Novogratz contributed $15 million into series B funding organized by BitGo. The startup has been able to collect $58.5 million in series B funding towards the launch of its services according to the report released on Thursday 17. BitGo is likely to enjoy the backing of the Wall Street’s giants paving the way for wealthy investors who have been pressuring Goldman Sachs to provide crypto custody services.
Banks and other financial institutions prefer to stay away from offering custody services for cryptocurrencies. This is because virtual currency assets are susceptible to hacking attacks. Besides, the regulator will need the firms to seek licenses that allow them to hold the clients’ assets. This situation is a blessing in disguise for startups like BitGo who are able to dive into the industry without facing a lot of competition. The co-founder of BitGo Mike Belshe said in a recent interview:
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. we’ve got to conquer that.
BitGo was launched in 2013; it provides its customers with digital wallets that are secured by multiple signatures when transacting. Moreover, it offers vault services for cryptos like Bitcoin and Ethereum among other coins. A deal to acquire Kingdom Trust, a custodian service provider failed in January this year forcing BitGo to create a custody service from the ground up. The spokesperson at Goldman Sachs, Michael DuVally said regarding the venture:
We believe that a custody offering is a logical precursor to digital asset market making.
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