UPDATED 05:05 EDT / MAY 26 2015

NEWS

Online gold savings and payment provider BitGold acquires GoldMoney for $42m

Online gold savings and payments provider BitGold, Inc. has acquired precious metals custody services group GoldMoney Network Ltd. for CAD$59.1 million ($42 million).

Under the deal, BitGold will acquire the intellectual property and operating assets of GoldMoney in exchange for the issuance of 11,169,794 common shares in BitGold. Three GoldMoney directors will join the to BitGold Board of Directors

Founded in 2001 GoldMoney provides high quality custody services for over $1 billion of customer assets held in gold, silver, platinum and palladium with vaults operated by London Bullion Market Association (LBMA) members in Hong Kong, London, Singapore, Toronto and Zurich.

GoldMoney standards ensure that before being taken into GoldMoney custody every single precious metal bullion bar is ultrasound inspected for purity and defects, and the precious metals as represented in the GoldMoney system are audited quarterly by Inspectorate International Limited under ISAE 3402 procedures to conclude that they are actually present and accounted for. The company further provides insurance at least equal to one hundred percent of the value of Metal owned by Customers.

“We are thrilled by the potential of this BitGold and GoldMoney combination, two companies with shared values and a common vision and purpose,” BitGold Chief Executive OfficerRoy Sebag said in a statement. “You will not find a precious metals asset manager with more integrity than the….GoldMoney team.”

“With the technology of the BitGold platform we can expand the GoldMoney legacy of trust, security, and a client-centric purpose to new markets, growing from a much stronger base and benefiting all stakeholders. Combining the first global e-marketplace for gold with the latest and most innovative, we instantly become the world’s largest and most active bullion money service.”

Based in Toronto, BitGold runs an online payments system and savings platform that is based around (as the name may suggest) gold. The company allows users to buy gold and store it, then use that gold to make payments to others. Payments can be made either via transfer from the site or using a BitGold debit card, including the abiltiy to draw against the gold in local currencies.

If it’s sounding kind of like Bitcoin but using a physical metal, the comparison isn’t far wrong with the company explaining:

The revolutionary technology of the blockchain, the technological basis of bitcoin, is an example of experiments in cooperation. The blockchain technology represents an exciting innovation for decentralized record confirmation and global value transfers. This technology however, was actually designed to mimic the natural value characteristics of gold, and the empirical experiments conducted over thousands of years that made gold the most important element for human cooperation.

The acquisition is a big expansion for what is essentially an e-commerce come fintech company that is trying to compete in the cryptocurrency space with a twist, and certainly provides it with the technology and services to further expand their business by now having the established support of a long-standing bullion vaulting company.

Founded in 2014, BitGold has raised $5.2 million over three rounds to-date. Investors include Sandstorm Gold, PowerOne Capital Markets Limited, Soros Brothers Investments and PortVesta Holdings.

Image credit: BullionVault/Flick/CC by 2.0


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