|Created by||Wences Casares & Federico Murrone|
Federico Murrone (COO)|
Ted M. Rogers (President)
Seamus Rocca (CFO)
|Products||debit cards, Bitcoin|
|Services||Bitcoin wallet, vault, debit card, currency exchange|
Xapo CEO and entrepreneur Wences Casares became interested in bitcoins because of the frequent financial fluctuations in his native Argentina. He has said that his family’s finances were “devastated as the economy (in Argentina) rocketed from inflation to deflation to devaluation.” Casares believes that digital currencies such as bitcoin “could solve the disjointed nature of our world economy.”
In 2011, Casares bought his first bitcoins but couldn’t find a way to store them, so he built a ‘vault’ for his own use. Friends, and later financial institutions, soon asked Casares if they could store their bitcoins in his vault. This became the foundation for Xapo, which was founded in late 2013 by Casares and COO Federico Murrone. Xapo opened its products to the public in March 2014.
Casares said Xapo was founded with the aim of making the bitcoin currency more secure and accessible. The Xapo Wallet operates through a mobile app and online and includes the ability to transfer funds to and from the Xapo Vault. In April 2014, Xapo introduced a debit card that will link to the user’s Xapo Wallet and will function like a standard debit card, except that it is backed by bitcoins instead of traditional currency.
Prior to Xapo, Casares founded and later sold online brokerage firm Patagon to Banco Santander for $750 million. He also launched the first Internet provider in his home country of Argentina in 1994.
The Xapo Vault consists of physical servers located around the globe that the company says is protected by biometric scanner access, 24-7 video surveillance, and armed guards. The servers are in undisclosed locations underground, according to Casares. Casares claims that Xapo “is the first bitcoin vault fully protected and insured against hacking and bankruptcy.” The Xapo Vault is insured by Meridian Insurance. Xapo bought the bunker, which was constructed in 1947 and is claimed to be a secret headquarters of the Swiss army during the Cold War.
In August 2014, Xapo announced it had raised $20 million to further enhance its security measures.
Full reserve banking
The Xapo vault holds client bitcoins following a full reserve banking and fully segregated model. Users can verify that their funds are in an individual multi-signature Bitcoin address and not pooled or co-mingled with other users' funds. Legal title to vault bitcoins is always users', with the property registered in their name following the model of allocated (bailment) gold contracts and never loaned, invested or put at risk. In case of Xapo going bankrupt or going through a process of liquidation, bitcoins in the vault would be completely insulated and vault users would have clear title to them.
Corporate Structure / legal
United States residents using Xapo.com services in the United States are engaging not with Xapo Limited (Hong Kong) but with Xapo, Inc., a Delaware corporation and a wholly owned subsidiary of Xapo Holding Limited (Cayman Islands) incorporated in 2014 with its principal place of business in Palo Alto, California, United States.
Xapo announced $20 million Series A funding in March 2014. The funding round was led by Benchmark, with participation from Fortress Investment Group, Pantera Capital, and Ribbit Capital. Benchmark partner Matt Cohler said the VC firm backed Xapo in part because Xapo “is led by one of the most important people in the bitcoin ecosystem, it’s insured and has investors from both Silicon Valley and Wall Street.”
The company has raised a total of $40 million as of August 2014.
In 2015 Xapo CEO, Wences Casares, was sued by security firm LifeLock, which acquired Lemon, a digital wallet company led by eventual Xapo founder Casares. LifeLock alleged Casares and his team developed the source code for Xapo using Lemon’s computers, property and resources while getting paid by Lemon. LifeLock has pulled the Lemon Wallet app from availability and taken the unusual step of deleting all data stored by current users after it deemed the app non-compliant with security standards. “We have determined that certain aspects of the mobile app may not be fully compliant with payment card industry (PCI) security standards,” said LifeLock CEO and Chairman Todd Davis."
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