Galaxy Digital Acquires Crypto Custodian GK8

Galaxy Digital Acquires Crypto Custodian GK8

Galaxy Digital, owned by Mike Novogratz, has won the bid to purchase GK8, a self-custody cryptocurrency company.

GK8 was first purchased for $115 million by Celsius in November a year ago. Due to the bankruptcy filing of Celsius, the self-custody firm was auctioned off.

Galaxy Digital did not disclose its acquisition price, but one of its representatives confirmed that it was significantly lower than the price at which GK8 was previously acquired.

The bankruptcy court still has to approve the acquisition.

Apparently, GK8 will make up the core of Galaxy Digital’s institutional service GalaxyOne, which provides clients with protected offline crypto storage.

Galaxy Digital Acquires Crypto Custodian GK8

Unlike custodial wallets that store funds with an exchange or lender, as well as hot wallets that connect to the Internet like MetaMask or TrustWallet, cold storage isolates crypto from the Internet by storing it in an offline wallet. Cold storage is commonly used with hardware wallets like Trezor and Ledger. 

According to the billionaire, adding GK8 at this critical juncture in the crypto industry underscores Galaxy’s continued commitment to growth through strategic opportunities. 

Galaxy also withdrew its $1.2 billion agreement to purchase another cryptocurrency custodian firm, BitGo, months before the current deal.

Afterward, BitGo sued Galaxy for “improperly repudiating the merger agreement and intentionally breaching it.”

Novogratz Faces Crypto Contagion

Even with the acquisition of GK8, Novogratz has also suffered from this year’s crypto meltdown.

Moreover, instead of just one massive crypto collapse, the billionaire CEO experienced two. 

As a former supporter of Cosmos-based Terra, Novogratz described the project’s failure as “a huge idea that failed.” Novogratz said his Terra tattoo would always remind him to stay humble when investing in venture capital.

Later, in November, Galaxy disclosed that the company had massive exposure to the bankrupt crypto exchange FTX of about $77 million in its Q3 financial report.

The founder of the exchange, Sam Bankman-Fried, has made several media appearances following the filing of the exchange’s bankruptcy, and Novogratz has been strongly critical of him. 

“Sam and his cohorts perpetrated a fraud; they used customer money to make bets that he poorly risk-managed,” the billionaire said.

< Back