Major crypto exchange Coinbase has finally acquired the prime cryptocurrency brokerage firm Tagomi, in a bid to bolster its offerings for institutional investors, the exchange said in a blog post on 27 May.
According to the announcement, the deal was made at a time when an increasing number of hedge funds and professional investors are venturing into the ever-so popular crypto space. Though the financial terms of the acquisition were not made public, the two companies did say that the deal is expected to be finalized later this year.
Coinbase said in its announcement:
“The acquisition will cap off a period of strong institutional focus for Coinbase, and comes at a time when the world’s most recognized professional investors and funds are giving increasing attention to the asset class.”
The Tagomi platform first went live 18 months ago, and since then has become one of the most reputable crypto brokerage firms on the market, attracting customers such as Paradigm, Pantera, Bitwise and Muticoin. The platform focuses on pooling buy and sell orders from around 10 large crypto exchanges, such as Coinbase, Binance, and Gemini, and then routes its clients transactions to the venues with the best prices.
Since its creation, the platform has made multiple connections with major initiatives in the crypto industry. This February, Tagomi became a member of the Libra Association, the governing body of the Facebook-led stablecoin project, while last November it secured a partnership with Binance.US, a move aimed at providing institutional liquidity to Tagomi’s users. Last March, the firm also became one of the few to acquire BitLicense from the New York State Department of Financial Services.
Rumors of Coinbase’s desire to acquire Tagomi have been floating around since the fall of 2019, when sources “familiar with the matter” claimed the prime broker was acquired by Coinbase for around $150 million. At the time, the crypto exchange was quick to deny the rumors.