Xapo raises $20 million for secure Bitcoin cold storage
With the dust settling after one of the largest trading platform for Bitcoin, MtGox closed, losing over $400 million, startups like Xapo still back the currency.
Xapo which is a California-based Bitcoin security company has raised $20 million in funding led by venture-capital firm Benchmark, Fortress Investment Group and Ribbit Capital. Founded by Wences Casares, the company has been operating for two years managing Bitcoins for large institutional clients. They are now opening up their service to consumers.
The popularity of Bitcoin has made it an alluring target for hackers and thieves. Casares realized that security is of utmost importance in order for the digital currency to gain mass adoption. “I recognize that those are extremes but, when you grow up in that environment you become much more aware of problems with currency. So, when I saw Bitcoin it was like a dream,” said Casares.
The company would be offering both the Bitcoin online wallet and Bitcoin cold storage vault. “Think of it like a leather wallet vs. a steel safe deposit box.” Casares takes seriously in providing protection to clients’ Bitcoins, “We use layer after layer of proprietary security protocol, including man, machine, and even a mountain to keep your bitcoins locked away in cold storage until you – and only you – want to access them.”
The vaults boast enhanced security, and their servers have never and never will have internet access, which means no hacker will be able to break in. Additionally, all the Bitcoins in the vault is fully insured, which will not only cover attacks by hackers, theft, and physical break-in at the vault, but also the bankruptcy of Xapo.
For Casares who is born in Argentina’s Patagonia region, a country long be racked by fluctuations of its currency, he said “My family had lost everything, several times, from inflation, to devaluation and confiscation.” Casares and Micky Malka, Ribbit’s founder have started four financial-service companies together.
Xapo already has thousands of accounts, ranging from hedge funds and venture capital funds to sovereign wealth funds and family offices.