BitGo Bucks Crypto Downturn to Raise Funding at $1.75 Billion Valuation

The crypto company raised $100 million from new investors, emphasizing its focus on following rules and regulations.

(Bloomberg) — In a chaotic year for US crypto companies, a few startups are still raising huge chunks of money. On Wednesday, crypto custody firm BitGo Inc. plans to announce that it has raised $100 million at a $1.75 billion valuation.

BitGo secures crypto assets by protecting private keys, sometimes in physical vaults. The company is currently the custodian for the creditors of bankrupt digital asset exchange FTX, while its legal proceedings play out. BitGo’s other customers include financial services firm Swan Bitcoin, blockchain developer Mysten Labs Inc. and apparel giant Nike Inc. 

Chief Executive Officer Mike Belshe acknowledged it’s “definitely a rough market.” But he said the company’s focus on being licensed and regulated has helped it stand out amid an uncertain legal landscape for digital assets, marked by ratcheting tensions over whether cryptocurrencies are securities. 

“Regulatory safety is just on everybody’s minds right now,” Belshe said. 

The Palo Alto, California-based company received the funding entirely from new investors, Belshe said. He declined to disclose who participated in the round, but said the backers were based in the US and Asia, and that some of them came from outside the crypto industry. BitGo’s previous investors include Goldman Sachs Group Inc., DRW Holdings and Galaxy Digital Ventures.

The startup’s valuation is substantially higher than its price tag in 2021, when the company was set to be acquired by Galaxy Digital Holdings in a $1.2 billion deal that was ultimately scrapped. 

Belshe said that the new funding will be used in part for strategic acquisitions, noting that there are at least two deals already in the works. In June, BitGo dropped plans to acquire the parent company of troubled crypto custodian Prime Trust amid allegations that the company had a shortfall of customer funds. 

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