BitGo and Swan Join Forces to Establish Exclusive Bitcoin Trust Company
"We're committed to establishing a custodial service that prioritizes the security of Bitcoin, without the added complexities of safeguarding various altcoins within the same trust company," emphasized Swan CEO Cory Klippsten.
BitGo, a leading crypto custodian, and Swan, a specialized bitcoin financial services firm, have announced their collaboration to create a trust company exclusively focused on Bitcoin custody. This initiative aims to provide custody services while minimizing exposure to the broader digital asset market.
Subject to regulatory approval, this joint venture will leverage BitGo's established custody capabilities along with Swan's proficiency in onboarding processes and fraud prevention. The resulting entity is poised to become the first Bitcoin-only trust company in the United States, as stated in a press release issued on Thursday evening.
BitGo CEO Mike Belshe highlighted, "We believe the optimal framework for the Bitcoin industry mirrors the proven model that has been integral to the U.S. financial sector for well over a century: the clear separation of exchange and custody."
Swan has previously utilized BitGo's custodial services for its Bitcoin storage requirements, alongside Nevada-based chartered trust company Fortress Trust, which has recently entered into an acquisition agreement with Ripple.
Regarding this acquisition, Swan CEO Cory Klippsten disclosed that efforts are underway to transition compliance and settlement operations to another partner. He stated, "We've been in the process of integration with Bakkt since early 2023, and we've already commenced the transfer of certain customer segments."
Klippsten further emphasized, "It's crucial for us to establish a custodial solution that eliminates the risks associated with securing a multitude of altcoins alongside Bitcoin within the same trust company."
In a separate development, crypto custodian Prime Trust underwent receivership in July, shortly after BitGo abandoned its plans for acquisition. Prime Trust CEO Jor Law revealed in a court filing in August that the firm incurred an $8 million loss in an investment related to the terraUSD algorithmic stablecoin, which experienced a collapse in May 2022.
Following the termination of the Prime Trust acquisition, BitGo successfully secured $100 million in funding, achieving a valuation of $1.75 billion.