Galaxy Digital completes $44 million acquisition of crypto self-storage platform GK8
Crypto-focused financial services firm Galaxy Digital Holdings Ltd. completed the purchase of digital asset custody platform GK8 on Thursday for $44 million after winning an auction to buy the company from bankrupt crypto lender Celsius Network.
GK8 offers managed self-custodial services for cryptoassets, allowing cryptocurrency holders to keep the keys to their wallets instead of handing them over to a third party. Through GK8’s technology, assets remain safely stored and accessible in the vaults, but institutional users maintain total control over their funds.
Using GK8’s cold wallet features, users can safely store and trade using cryptocurrencies without connecting to the internet. The firm also offers a multi-party computational vault, which is an automated crypto storage method that operates by sharing access between multiple people who must sign a transaction before assets can be moved.
Galaxy intends to continue to support GK8’s operations by providing self-storage services independently. It will incorporate its solutions into its own ongoing development of GalaxyOne, a new premium brokerage offering for institutional investors. The GalaxyOne service will allow investors to combine trading, lending, management across portfolios and derivatives to be supported by custody management of cryptocurrencies and include services from GK8.
Celsius Network, a crypto lender, filed for bankruptcy in July after it was caught in the wake of the implosion of crypto exchange FTX Trading Ltd. The company put several of its assets up for sale, including GK8. The bankruptcy gave Galaxy the opportunity to buy the crypto custody company at a steep discount.
“The acquisition of GK8 is a crucial cornerstone in our efforts to create a truly full-service financial platform for digital assets, ensuring that our customers will have the ability to store their digital assets on or separately from Galaxy without compromising of versatility and functionality,” said Mike Novogratz, founder and CEO of Galaxy.
Through the acquisition, Galaxy will add a team of nearly 40 people, including several cryptographers and blockchain engineers. Since GK8 is headquartered in Tel Aviv, Galaxy will also have an office in the region and expand its global reach.
Galaxy intends to retain GK8’s founders, Chief Executive Lior Lamesh and Chief Technology Officer Shahar Shamai, who will lead Galaxy’s new custody technology division.
“We have worked hard to become the most secure platform of choice for financial institutions participating in the digital asset ecosystem,” said Lamesh. “With the support of Galaxy, we aim to introduce new and exciting offerings to the industry that showcase a combination of Galaxy’s best-in-class services and GK8’s cryptography, security and unparalleled R&D capabilities.”
