Following the acquisition of GK8, Galaxy Digital plans to integrate the service with its core brokerage platform GalaxyOne.
Galaxy Digital has reportedly finished the $44 million acquisition of GK8, an institutional self-custody platform. The GK8 acquisition comes more than two months after Galaxy Digital obtained the rights to buy the then Celsius asset.
Following the acquisition, GK8 solutions would continue to be available on the market. However, Galaxy Digital plans to integrate the self-custody platform technology with its own inbound main brokerage platform, GalaxyOne.
Potential benefits of acquiring Galaxy Digital GK8
By developing GalaxyOne, Galaxy Digital could offer a variety of enhanced financial services for institutions. These services include lending, trading, derivatives, cross-portfolio margin, and various other custody options. Additionally, Galaxy’s purchase of GK8 also sees the blockchain leader gain an office in Tel Aviv, Israel, in addition to a 40-person team. This team includes the founders who joined Galaxy to spearhead its custodial technology initiative.
Weighing in on the development, Galaxy Digital founder and CEO Mike Novogratz said in a press release:
“Investor demand for innovative and secure custody services continues to grow, and the acquisition of GK8 enhances our efforts to offer clients best-in-class cold storage solutions coupled with cutting-edge wallet technology. As well as continuing to offer clients great value custody technology, the GK8 team will play a critical role in our evolution to offer a full-service financial platform for digital assets.”
GK8
GK8’s solutions cater to major financial and crypto-centric establishments, including banks, hedge funds, and brokerage client eToro. Founded in 2018, the infrastructure grants clients access to a suite of blockchain-backed services and efforts. These include decentralized finance (DeFi) networks, staking, trading services, and non-fungible token (NFT) support.
Users can access GK8’s services through a Multi-Party Computing (MPC) Vault, an automated cryptographic storage method. This method works by dividing the private key required to access the assets among countless co-signers and a cold vault.
Cold vaults keep assets safe by staying offline. Since there is no Internet connection, hackers cannot access the private keys. However, despite being more secure, transactions processed manually through cold wallets are slower. Also, most of the products on the market need to go online eventually to get blockchain-validated data for transaction verification.
In a media session, GK8 CEO Lior Lamesh explained that the platform has developed proprietary cryptographic techniques. These techniques make it easy to create, sign, and send transactions from GK8’s cold vault to the blockchain without an internet connection.
GK8 was one of several assets put up for sale by Celsius following its bankruptcy last July. The insolvent crypto lender had acquired GK8 for $115 million in November 2021, but sold it to Galaxy for $44 million. As a result, Galaxy took over the institutional self-custody platform at a discount of more than 60%. The blockchain firm previously backed out of a $1.2 billion deal with BitGo, resulting in a lawsuit by the latter.
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Tolu is a Lagos-based blockchain and cryptocurrency enthusiast. He likes to demystify the crypto stories down to the basics so that anyone anywhere can understand them without too much prior knowledge. When he’s not up to his neck in crypto-stories, Tolu likes music, loves to sing, and is an avid movie buff.
