Unchained Capital raises $60 million to expand its bitcoin financial services

Austin, Texas-based Unchained Capital Inc. announced today that it has raised $60 million in new funding to expand its financial services for bitcoin holders during what have been chaotic markets.

The Series B funding round was led by Valor Equity Partners, known for early investments in SpaceX and Tesla. The round closed earlier in April with participation from existing investors including NYDIG, Trammell Venture Partners, Ecliptic Capital and Highland Capital Partners. It builds on the $15 million raised by the company last autumn, led by Ten31.

Unchained Capital uses what is called a “collaborative custody” model for bitcoin holders to store their cryptocurrency. The company’s solution uses an underlying technology in bitcoin that allows multiple parties to maintain private keys and share control of bitcoin holdings between themselves, Unchained or other financial companies.

The technology uses a multi-signature concept which essentially requires more than one party to agree to move cryptocurrency before anything can happen. Unchained and any other financial institution cannot trade held cryptocurrency without disclosing from the other signatory, which helps to eliminate dangers such as theft or loss of keys, but also prevents anything from happening to holdings if something happens to one of the signatories.

The recent collapse and bankruptcy of the crypto exchange FTX Trading Ltd. and other centralized crypto companies have proven that keeping cryptocurrency with companies can lead to the loss of tokens. However, if they are signed by multiple parties, it reduces the risk that they can simply be moved or used without permission – or that someone simply runs off with them.

The company claims to secure more than $2 billion in bitcoin assets across thousands of keys around the world. Among its financial services, it provides bitcoin-backed loans and has provided more than $500 million in loans since 2017, with zero losses. The company also offers a trading desk for clients to buy bitcoin directly into cold storage (a multi-signature vault), and it also has an individual retirement account offering that allows clients to hold keys to bitcoin in tax-advantaged accounts.

“In the midst of market chaos, Unchained has emerged as a highly trusted bitcoin custody and financial services provider through superior technology, risk management, regulatory compliance and customer service,” said Vivek Pattipati, a partner at Valor. “Especially in lending, the company has differentiated itself by minimizing risk for both the lender and the borrower, which has led to resilience and an extraordinary opportunity to take market share.”

Unchained plans to use the funds to expand its customer base and expand its product offering, especially given bitcoin’s recent market turmoil. CEO Joe Kelly said the funds will go towards doubling the product suite and tackling long-requested features, upgrades, safety features and quality-of-life improvements.

Some of the funds will also be used to capitalize on the growing use of bitcoin, with an eye on how people exchange bitcoin for dollars. In light of this, Unchained Capital intends to begin offering dollar-focused products such as checking accounts and credit cards.

“By using this fresh capital investment to expand our reach and suite of services,” Kelly said, “we hope to enable new entrants to bitcoin to leapfrog centralized custodians into our safer collaborative model.”

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