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

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The cryptocurrency custody company BitGo has defied the
odds to raise a substantial $100 million in funding at 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.</p><p>Regulatory Safety</p><p>According to a report by
Bloomberg, the company’s CEO, Mike Belshe, acknowledged the challenging market
conditions but attributed <a href="https://www.financemagnates.com/tag/bitgo/" target="_blank">BitGo</a>’s success to its adherence to licensing and
regulations, which has reportedly enabled the company to defy uncertain legal
environment facing digital assets.</p><p>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.</p><p>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 <a href="https://www.financemagnates.com/cryptocurrency/prime-trust-unravels-files-for-bankruptcy-after-acquisition-intent-fails/" target="_blank" rel="follow">filed for bankruptcy</a> this week.</p><p>The currency 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 <a href="https://www.financemagnates.com/terms/a/acquisition/">acquisition</a> resulted in a lawsuit that revolved around BitGo’s
claims of a prematurely terminated acquisition agreement.</p><p>Failed Acquisitions Plans</p><p>In light of the matter,
the court <a href="https://www.law360.com/assetmanagement/articles/1687379/galaxy-validly-ended-1-2b-bitgo-crypto-deal-del-court-says" target="_blank" rel="follow">concluded</a> 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.</p><p>In June, <a href="https://www.financemagnates.com/tag/nomura/" target="_blank" rel="follow">Finance Magnates</a> reported that BitGo has opted to <a href="https://www.financemagnates.com/cryptocurrency/crypto-custody-provider-bitgo-ditches-plan-to-acquire-rival-prime-trust/" target="_blank" rel="follow">abandon
its intended acquisition of Prime Trust</a>, 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.</p><p>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 <a href="https://www.financemagnates.com/terms/b/bankruptcy/">bankruptcy</a> in June.</p>

This article was written by Jared Kirui at www.financemagnates.com.