UPDATED 12:45 EDT / MARCH 18 2021

BLOCKCHAIN

Crypto custodial service Fireblocks raises $133M in Series C round

Fireblocks Inc., a cryptocurrency custodial services company, today announced it closed a new funding round worth $133 million from new and existing investors.

The Series C round was led by Coatue Management LLC, Rabbit Capital and Stripes with strategic investment from BNY Mellon and SVB Capital. According to the company, Fireblocks is now the most well-funded financial infrastructure provider in the industry – giving it a total of $179 million raised to date.

Fireblocks provides specialized custody and transfer infrastructure of cryptocurrency assets for banking institutions. That allows banks to provide clients storage and trade capability for assets such as bitcoin, Ethereum, Litecoin and other cryptocurrencies as well as retain regulatory compliance with reduced risks of fraud and other security concerns.

“Fintechs and banks require not only a specialized custody and settlement infrastructure to ensure customers’ funds are safely managed, but a platform that enables new lines of digital offerings,” said Michael Shaulov, chief executive of Fireblocks. “While we have no plans to become a bank, we believe our infrastructure will lend itself perfectly to power an entirely new era of financial services.”

Fireblocks infrastructure is intent on providing banks what it calls “direct custody” solutions within their organizations. This model, which provides banks access to their own assets within their own wallets using their own cryptographic keys, allows financial institutions to provide their customers a top-tier experience, powerful compliance operations and high security without sacrificing liquidity options.

The importance of this is that it escapes from what Fireblocks calls “digital-native sub-custodians,” which are attempting to mirror traditional financial models onto digital assets by holding the cryptocurrency assets themselves and instead issue securities rather than self-owned custodial services.

Fireblocks sees this as a commitment to ensuring that all institutions have open access to the digital asset ecosystem. That requires those same institutions to retain full control over their assets — the essence of distributed ledger blockchain technology, which underpins all cryptocurrency.

Interest in cryptocurrency and similar assets is continuing to heat up across multiple industries. For instance, Morgan Stanley became the first major U.S. bank to offer clients access to bitcoin funds, reported by CNBC on Wednesday. As more major institutions come on board, it will become necessary to secure and control those assets.

Also, this month, PayPal Holdings Inc. acquired digital asset Curv Inc. to expand its ability to support cryptocurrencies natively to its platform. Similar to Fireblocks, Curv develops custodial and transfer technology for the storage and management of digital assets on blockchains and distributed ledgers – although it does so for wallets, which PayPal wants to deliver for clients, given its particular service model.

With this funding round, Fireblocks is looking to take advantage of the coming disruption to traditional finance as distributed finance becomes the trend with digital assets led by cryptocurrency.

The company seeks to do so by providing direct access to those assets with a secure platform and high scalability in a highly regulated industry that requires compliance tools that require high trust and high uptime.

Image: TheDigitalArtist/Pixabay

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