Coinbase, one of the more influential cryptocurrency companies, especially in the West, is said to have shelled out $150 million to acquire prime broker Tagomi. The rumors of this deal have been on the table for most of November, and it appears as if the trigger has finally been pulled.
Tagomi, which has raised $28m in venture capital funding from firms like Pantera and Morgan Creek, was founded last year by ex Goldman traders and former Union Square Ventures employees. Its pedigree thus comes with a good mix of crypto and traditional finance.
In fact, the firm has been in the news a lot of late as it with Finance.US, to bring extra liquidity to the exchange. More so, it has achieved a rare thing in New York, having been granted a difficult to acquire ‘BitLicense’ – one of only 20 crypto companies to have done so.
This news is still unofficial as neither Coinbase or Tagomi have confirmed with Coindesk at the time.
Tagomi appears to be a good acquisition for Coinbase as, in its initial funding rounds, it was billing itself as crypto’s answer to Wall Street prime brokerages. The reason this is important in the cryptocurrency world is that it offers specialized services that are currently lacking.
In traditional finance, prime brokerage refers to a bundle of specialized services offered by investment banks and securities dealers to their hedge fund clients. Tagomi is “agency-only,” meaning that the firm offers consulting services for its clients to determine “how best to execute a trade or fund strategy,” Jennifer Campbell, a Tagomi co-founder, told CoinDesk, adding:
“Importantly, it also means that we can optimize for best execution – our clients are sophisticated investors who care strongly about execution and price transparency.”
The brokerage offers trading services for bitcoin, ethereum and other digital assets, and went live in December.