BitGo

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BitGo, Inc.
BitGo Color Large.png
HeadquartersPalo Alto, CA
Founder(s)
Key peopleMike Belshe (CEO)
Services
  • Bitcoin
  • blockchain security platform API's
  • custodial services
  • settlement services
URLwww.bitgo.com
Launched2013; 9 years ago (2013)

BitGo, Inc. is a digital asset trust company and security company,[1][2] headquartered in Palo Alto, California. It was founded in 2013 by Mike Belshe and Ben Davenport. Galaxy Digital announced its acquisition of BitGo in 2021 for $1.2 billion, although this acquisition was announced to have been canceled in 2022 after the crypto downturn, with BitGo continuing as an independent company.[3]

The company offers a multisignature bitcoin wallet service, where keys are divided among a number of owners to manage risk. Generally, BitGo wallets have three keys: one held by BitGo, and two held by the wallet's owner.[4][5] Wallets can be configured in both hot and cold configurations,[6] as well as non-custodial and custodial configurations.

BitGo also serves as the sole custodian for bitcoin that people deposit to receive a tokenized form of that bitcoin known as Wrapped Bitcoin or WBTC that can be exchanged on the Ethereum blockchain.[7]

History[edit]

In June 2014 the company received US$12 million in venture capital funding led by Redpoint Ventures.[8]

In January 2015 BitGo announced the general availability of their Platform API. The following month the company bought an insurance policy from XL Catlin against theft from its wallets.[9]

On August 2, 2016, Bitfinex, a digital currency exchange using BitGo software, announced it had suffered a security breach.[10] BitGo was not itself hacked, but processed withdrawal requests from the hacker, who had obtained access to Bitfinex's keys.[11]

In September 2018, BitGo was approved by the South Dakota Division of Banking to act as a qualified custodian for digital assets and created BitGo Trust Company.[12]

In October 2018, the company raised US$15 million in venture capital funding from Goldman Sachs and Mike Novogratz's Galaxy Digital.[13]

In December 2020, the Office of Foreign Assets Control announced that BitGo has paid $98,830 to settle apparent violations of multiple sanctions programs.[14]

In March 2021, BitGo Receives NY Trust Charter from the New York State Department of Financial Services.[15]

In May 2021, Galaxy Digital announced its acquisition of BitGo for $1.2 billion in a cash and stock deal, marking the first $1 billion deal in the cryptocurrency industry.[16] In August 2022, Galaxy's Board of Directors terminated the deal following BitGo's inability to provide certain financial statements needed by Galaxy for its SEC filing. BitGo claimed that it had provided its audited financials and honored its obligations, and that it would take legal action against Galaxy and seek a $100 million termination fee.[17]

In a Delaware Chancery Court complaint dated Sept. 15, 2022, BitGo asserted that while it had filed the required financial reports, Galaxy twice used last-minute criticisms of the accounting methods employed to first delay and then scuttle the acquisition. The suit sought at least $100 million under a termination agreement that was part of the takeover accord between the companies. Galaxy told Forbes that it “completely” disagreed with the allegations.[18]

References[edit]

  1. ^ KING 5 News (January 20, 2014). "Seattle entrepreneur mines Bitcoin phenomenon". KING-TV.
  2. ^ Robert McMillan (April 9, 2014). "A Hack That Makes Bitcoins a Whole Lot Harder to Steal". Wired.
  3. ^ Vigna, Paul (May 5, 2021). "Galaxy Digital to Buy BitGo in Crypto Sector's First $1 Billion Deal". Wall Street Journal. ISSN 0099-9660. Retrieved May 23, 2021.
  4. ^ Michael J. Casey (June 16, 2014). "Bitcoin Security Startup BitGo Gets More Funds; Ex-Verisign CEO Joins Team". The Wall Street Journal. Retrieved October 20, 2018.(subscription required)
  5. ^ Kim-Mai Cutler (June 16, 2014). "BitGo Raises $12M Led By Redpoint For Multi-Signature Bitcoin Wallets, Services". TechCrunch. AOL. Retrieved October 20, 2018.
  6. ^ "Crypto Startup Offers Insurance Against Quadriga Wallet Dilemma". June 11, 2019. Retrieved June 12, 2019.
  7. ^ Kharif, Olga (October 29, 2020). "Bitcoin Rally Gets Added Boost From 'Wrapped' Crypto Tokens". Bloomberg.com. Bloomberg. Retrieved November 7, 2020.
  8. ^ Dara Kerr (June 16, 2014). "Bitcoin security platform BitGo raises $12M in funding". CNET. CBS Interactive. Retrieved October 20, 2018.
  9. ^ Michael J. Casey and Paul Vigna (February 25, 2015). "BitBeat: BitGo Adds Comprehensive Insurance to Its Services". The Wall Street Journal. Retrieved October 20, 2018.(subscription required)
  10. ^ "Bitcoin worth $72 million stolen from Bitfinex exchange in Hong Kong". Reuters. August 3, 2016. Retrieved June 12, 2019.
  11. ^ Ho, Victoria (August 3, 2016). "Prominent Bitcoin exchange hacked wiping $65 million from wallets". Mashable. Retrieved June 12, 2019.
  12. ^ Kate Rooney (September 13, 2018). "Companies race to solve bitcoin's security problem despite slumping prices". CNBC. Retrieved October 21, 2018.
  13. ^ "Goldman Wades Deeper in Crypto, Betting on BitGo With Billionaire Mike Novogratz". June 11, 2019. Retrieved June 12, 2019.
  14. ^ "Settlement Agreement between the U.S. Department of the Treasury's Office of Foreign Assets Control and BitGo, Inc". U.S. Department of the Treasury. December 30, 2020.
  15. ^ "BitGo Receives NY Trust Charter from the New York State Department of Financial Services". www.bloomberg.com. Retrieved September 2, 2021.{{cite web}}: CS1 maint: url-status (link)
  16. ^ Vigna, Paul (May 5, 2021). "Galaxy Digital to Buy BitGo in Crypto Sector's First $1 Billion Deal". Wall Street Journal. ISSN 0099-9660. Retrieved May 23, 2021.
  17. ^ Yang, Yueqi (August 15, 2020). "Novogratz's Spurned Takeover Target Seeks Termination Fee". Bloomberg News. Archived from the original on August 15, 2022.
  18. ^ Miller, Rosemarie. "BitGo Bites Back, Says Galaxy Unfairly Tanked $1.2 Billion Takeover It Found `Unpalatable'". Forbes. Retrieved September 22, 2022.

External links[edit]