Enterprise cryptocurrency wallet and custodial services startup BitGo Inc. has been acquired by Galaxy Digital Holdings Ltd. for $1.2 billion.

Founded in 2013, BitGo offers enterprise-grade multiuser cryptocurrency wallets along with application programming interface access to its underlying security platform. Offering “multisig,” for multisignature, the company’s cryptocurrency wallets require a transaction to have two or more signatures before it can be executed, a security layer that reduces the risk of fraud.

In addition, BitGo offers institutional investors security, compliance and custodial solutions for blockchain-based currencies. A custody service is where a brokerage or other financial institution holds securities on behalf of the client to reduce the risk of the client losing assets or having them stolen.

BitGo’s acquisition by Galaxy Digital, announced today, comes after it was reported in December that PayPal Holdings Inc. was discussing buying the company.

For Galaxy Digital, a full service digital asset merchant bank that offers trading, asset management and principal investment, the acquisition of BitGo is said to position the company as a leading global full-service platform for institutions seeking access to the cryptocurrency economy through an “unparalleled breadth of industry-leading products and services at scale.”

“The acquisition of BitGo establishes Galaxy Digital as a one-stop-shop for institutions and significantly accelerates our mission to institutionalize digital asset ecosystems and blockchain technology,” Mike Novogratz, chief executive officer and founder of Galaxy Digital, said in a statement. “The power of the technology, solutions, and people we will have as a result of this acquisition will unlock unique value for our clients and drive long-term growth for our combined business.”

Before its acquisition, BitGo had raised multiple rounds in venture capital funding, including $57 million in October 2018 and $42.5 million in December 2017. Investors included, perhaps not surprisingly, Galaxy Digital along with Valor Equity Partners DRW, Craft Ventures and Redpoint Ventures.

It’s a nice payday for BitGo’s investors, since the round in 2018 was raised on a valuation of $170 million. As The Wall Street Journal noted, Galaxy Digital’s acquisition of BitGo is the first $1 billion deal in the cryptocurrency industry.

Image: BitGo