Mike Novogratz’s crypto-focused financial services firm Galaxy Digital has completed the purchase of institutional self-custody platform GK8 after winning an auction to buy the company from bankrupt crypto lender Celsius Network. The acquisition comes more than two months following Celsius’ filing for bankruptcy protection in July due to market conditions during the crypto winter.
Galaxy obtained GK8 at a substantial discount of more than 60%, paying approximately $44 million compared to Celsius’ original purchase price of $115 million. This deal follows Galaxy’s termination of a previous agreement to acquire BitGo for $1.2 billion, which resulted in a lawsuit against the firm. Going forward, GK8 solutions will remain available in the market, and Galaxy plans to integrate its technology into its pending prime brokerage platform, GalaxyOne.
Galaxy can provide financial services such as trading, lending, derivatives, and cross-portfolio margining through this purchase with secure cold storage solutions and cutting-edge wallet technology for institutions. The team at GK8 will join Galaxy’s nearly 40-person squad in Tel Aviv and lead their custodial technology offering.
According to Novogratz, “The acquisition of GK8 enhances our efforts to offer clients best-in-class cold storage solutions and cutting-edge wallet technology. We look forward to continuing to offer highly valuable custody technology to our clients. The GK8 team will be a key part of our evolution to offer a full-service financial platform for digital assets.”
GK8’s MPC and cold vault: The future of crypto asset custody?
Founded in 2018, GK8 offers tailored solutions for traditional finance and crypto-native institutions such as banks, hedge funds, and brokerage clients eToro. Their infrastructure enables clients to access staking services, decentralized finance (DeFi) networks, non-fungible token (NFT) support, trading services, and more.
GK8 utilizes two systems to keep assets secure: a multiparty computation (MPC) vault that splits the private key used to access the assets between multiple co-signers and a cold vault where transactions are processed manually. What sets their cold wallet apart is the patented cryptographic techniques that allow it to create, sign and send transactions to the blockchain without an internet connection, according to CEO Lior Lamesh.
