BitGo Acquires Security Token Provider Harbor

BitGo Acquires Security Token Provider Harbor

  • BitGo announced its plan to acquire the security token startup Harbor
  • The deal is a part of BitGo’s plan to expand into digital securities space
  • The acquisition also includes Harbor’s broker-dealer and transfer agent subsidiaries

BitGo said yesterday it will acquire the security token company Harbor, as a part of its plan to expand into the digital securities world.

The deal was completed quickly, said a spokesperson. BitGo didn’t want to disclose the terms of the deal or when the two companies first spoke.

Terms of the deal also include Harbor’s broker-dealer and the transfer agent subsidiaries. The first one is regulated by the Financial Industry Regulatory Authority while the latter is monitored by the Securities and Exchange Commission.

The takeover will allow BitGo to expand outside of the crypto custody scene, making the company the first “full-stack” service provider in the digital securities space, as described by CEO Mike Belshe.

Moreover, the deal will also let the crypto custodian restore all parts of the traditional financial system, Belshe added, pointing out that BitGo itself is a licensed crypto custody provider, through the South Dakota Division of Banking.

“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.

This is the first time that a company from the cryptocurrency space holds broker-dealer, transfer agent and qualified custodian licenses, said Belshe. The broker-dealer and transfer agent’s move to BitGo is yet to be approved by FINRA and the SEC, but the process has already been initiated.

BitGo has been interested in digital securities for a while. It had provided custodian services to Harbor before the takeover and is linked to rival Securitize as well.

BitGo’s Chief Technology Officer Ben Chan said that the company believes the digital assets will “drive the global economy” in the long term, noting “from a platform perspective, the platform we built can support stocks, bonds, and so on.”

Harbor was only providing security tokens for other companies in the beginning, before starting to facilitate the tokenization of existing securities. Several months ago, Harbor issued Ethereum tokens representing shares of four different real estate funds, amounting to around $100 million.

Harbor got its broker-dealer and transfer agent licenses in autumn 2019.

By Michael Harris
Specialising in economics by academia, with a passion for financial trading, Michael Harris has been a regular contributor to Invezz. His passion has given him first hand experience of trading, while his writing means he understands the market forces and wider regulation.

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