Acquisition talks between payment giant PayPal and crypto custodian BitGo have broken down after the two sides apparently failed to agree on a valuation. Bitgo, which provides institutional clients with security and financial services for digital assets, was last valued at $170 million in a 2018 funding round.
BitGo CEO Mike Belshe refused to confirm PayPal rumors, but told Fortune in a recent interview that they have been “in talks with everyone over the years” and that his crypto wallet and blockchain security firm won’t accept a “small exit.”
PayPal has been reportedly exploring acquisitions of cryptocurrency companies, including California-based BitGo, as the US firm plans to expand its embrace of cryptocurrencies. Anonymous sources in the report claimed that PayPal might consider other potential targets after the negotiations fell apart.
The takeover rumors came shortly after PayPal officially made its move into the cryptocurrency market back in October. Even before that, there were a few pieces of evidence to suggest that the payment giant is showing interest in getting involved in cryptocurrency.
BitGo Bags $16 Billion in Assets Under Custody
A prime, and recent example of PayPal’s involvement in the space was the firm’s investment in cryptocurrency compliance and risk management platform TRM Labs. Additionally, PayPal filed many related patents including one to speed up bitcoin transaction processing times through a faster cryptocurrency payment system.
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Founded in 2013, BitGo operated originally as a bitcoin wallet provider but then branched out into other cryptocurrencies and now supports multiple altcoins. The company provides multi-signature wallets alongside qualified custodial services and access to liquidity through its institutional-focused trading service, BitGo Prime.
BitGo also allows its users to cover up to $100 million worth of their digital assets held in their accounts with the blockchain security firm.
Just a few hours before PayPal’s decision to drop its bid, BitGo said it has reached $16 billion in digital assets under custody (AUC), citing institutional interest in cryptocurrencies.
“We’re seeing unprecedented interest from institutional investors as a result of the pandemic’s economic impact, as well as Bitcoin’s extraordinary performance. Today, BitGo is trusted by over 400 clients spanning 50 countries. Many are the world’s top exchanges and platforms such as Bitstamp, Nexo, and Pantera,” said Mike Belshe.