Coinbase-Xapo FUD: Top Coinshares official clears ongoing allegations
The news of Coinbase planning to acquire Xapo, a Bitcoin wallet and cold storage provider had stirred up the cryptocurrency market, with many speculating that the Brian Armstrong-led company was trying to acquire other assets without increasing their prices.
In a way to dissipate the FUD surrounding the planned acquisition, Meltem Demirors, the Chief Strategy Officer of Coinshares shared a Twitter thread detailing the effects of the buyout. Demirors’ first tweet read:
“the @xapo FUD is so silly
the company itself is not being sold. only the *institutional* custody component.
i assume xapo is going to keep the cash on its balance sheet, and continue operations
xapo does not charge for custody. the acquirer will (likely) charge.”
“ 4. if customers have to now pay, they will likely evaluate the dozen or more competitors
5.xapo may ask large custody clients to sign a 12 month agreement to stay, but difficult to implement
6.liability on institutional custody is *huge*”
Coinbase’s movement towards institutional custody was also evidenced by the company’s launch of Coinbase Custody. The service, although peppered with several critical comments, stood its ground in maintaining customer security as the number one priority. This was made clear again when Sam McIngvale, the Head of Product for Coinbase Custody, claimed that the organization was putting its own funds and not the customers’ funds at risk. He had stated:
“Now, your point about how do you actively participate, there’s bonds [security deposit] for these networks. The way we’re are getting around that is Coinbase custody is actually purchasing the bond on behalf of our clients.”
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