Rumors of Xapo Acquisition by Coinbase Leads Coinshares’ Meltem Demirors to Provide Clarity
- Meltem Demirors and Sam McIngvale comment on the acquisition of Xapo by Coinbase.
- Coinbase is only acquiring the custodial side of Xapo, rather than the entire company.
The Block recently reported on a potential acquisition of a Bitcoin wallet and cold storage provider called Xapo by Coinbase. Some of the analysts and others in the community have said that the cause of the acquisition is that the company is trying to add other assets but without having to increase their own prices.
Meltem Demirors, the Chief Strategy Officer for Coinshares, took to Twitter in an attempt to dissipate the FUD that has risen up around the conversations on the acquisition. His post includes details about how the buyout ultimately affects the industry.
In the first tweet, Demirors broke down a few facts that consumers need to know about this acquisition, starting with the fact that the acquisition is not the company being sold. Instead, the institutional custody aspect of the company has been acquired. She also pointed out that the acquirer will most likely charge for custody, rather than Xapo.
In the next tweet, Demirors clarified a few more points, starting with the possibility of customers having to pay. If payments become necessary, it is possible that there will be an evaluation of competitors. Furthermore, if there are large custody clients that Xapo wants to keep, they could ask the clients to sign an agreement for the next 12 months. However, this concept would be hard to actually enforce.
In the third and final tweet, Demirors notes that custody providers vary in their approach from the tech and ops side.
The transition to institutional custody has been clear, considering the Coinbase Custody launch. Even though there are some people who have criticized this decision, the service is has been clear about maintaining customer security as a priority. Sam McIngvale, who is the head of product for the custodial service, stated that the organization was risking their own funds, rather than the customers’ funds, during this process.