BitGo said it has acquired Harbor, a security token platform best known for a failed tender to offer tokenized shares of an apartment building in South Carolina, the crypto-custodian announced Tuesday.
Harbor’s affiliates, which include a broker-dealer licensed by the Financial Industry Regulatory Authority and a Securities and Exchange Commission supervised transfer agent, will be included in the purchase, the companies said. The move helps BitGo to extend its custody services, becoming the first full-stack service provider in the digital securities space, as CEO Mike Belshe has said. Terms of the deal are not yet to be disclosed.
Successful Takeover of Security Token Platform
Essentially, the purchase helps BitGo to reinvent all aspects of the traditional financial system, Belshe said, adding that BitGo itself is a licensed custodian through Banking’s South Dakota division.
“As we build the market infrastructure for crypto there’s a lot of pieces to put together. At the end of the day the existing market has this huge advantage in having built up its structure over decades and we’re trying to replicate that in a short period of time,” Belshe said.
First Of Its Kind Takeover
It is worth noting that, the BitGo takeover marks the first time a single entity holds broker-dealer, transfer agent and a qualified custodian license in the cryptocurrency space, Belshe said (FINRA and the SEC must approve the broker-dealer and transfer agent transfers to BitGo, a process that Belshe said is already in progress).
Furthermore, qualified custodians can hold securities on behalf of investors, including institutions; broker-dealers can trade these securities for themselves or customers; and transfer agents serve as intermediaries who help monitor transactions, among other duties.
While Belshe did not say how much the company holds in assets under management, he said that BitGo conducts some $15 billion in transactions every month, including international clients’ transactions.
Under the acquisition, the firm will add the Harbor products and services, although an exact roadmap has not yet been finalized.