What happened: Digital currency exchange Coinbase is reportedly in talks to acquire Hong Kong-based crypto storage company Xapo’s bitcoin custody business, according to The Block. The deal could be worth around $50 million, and Coinbase reportedly beat out Fidelity Digital Assets for the acquisition. Xapo is said to hold as much as $5.5 billion in crypto assets under custody (AUC), translating to roughly 700,000 bitcoin.
Why it’s important: Adding billions in assets would be valuable for Coinbase, which launched its custody service last July. According to CEO Brian Armstrong at this year’s Consensus conference, Coinbase Custody currently has $1 billion crypto under management and 70 participating institutions. Bringing Xapo–which is backed by the likes of Winklevoss Capital and David Marcus, who heads Facebook’s crypto project–under its fold looks to be a solid move for Coinbase, which recently expanded into 50 new jurisdictions.