Coinbase Acquires Crypto Prime Brokerage Firm, Tagomi, Strengthening Its Institutional Product Suite
The US-based cryptocurrency exchange Coinbase has announced that it is to acquire Tagomi, a crypto prime brokerage platform. However, the deal isn’t finalized yet as it is subject to regulatory approvals and won’t be closed until later this year.
We're excited to announce that we've agreed to acquire @tagomisystems, the leading crypto prime brokerage platform. The deal will round out our institutional product suite and provide prof. investors and funds an all-in-one solution for crypto trading. https://t.co/Qij2FmcX7M
— Coinbase (@coinbase) May 27, 2020
With the “world’s top hedge fund and macro investors entering the space,” Coinbase plans to bolster its services for trades and sophisticated crypto investors. The announcement reads,
“The acquisition will cap off a period of strong institutional focus for Coinbase, and comes at a time when the world’s most recognized professional investors and funds are giving increasing attention to the asset class.”
Less than a week ago, Genesis capital announced the acquisition of custodian Volt to build the prime brokerage in an attempt to become the Goldman Sachs of crypto by offering a full suite of services to its clients.
Interestingly, Genesis' sister company Grayscale that holds about 2% of all bitcoin uses Coinbase for crypto custody. For custody, Coinbase acquired Xapo in a $55 million deal last year.
Bringing the First Electronic Prime Brokerage in Crypto
Over the past year, Coinbase has seen a “swell in demand from institutional investors” which it says has been driving tremendous growth in terms of volume and custody offering.
This is why the exchange introduced margin trading for institutional investors, added new tools, appointed Brett Tejpaul as Head of Institutional Coverage, and is now planning to “onboard the first electronic prime brokerage in crypto.”
Launched 18 months ago, Tagomi is used by Pantera, Bitwise, Paradigm, and Multicoin among others.
The latest move will allow the company to offer custody, professional trading features, and prime brokerage services on one platform. Also, to provide the kind of seamless experience people expect in the fast equities and FX market.