Galaxy Digital to Acquire Israeli Custody Firm GK8 from Celsius Network

Cryptocurrency financial services firm, Galaxy Digital Holdings Ltd (TSE: GLXY) has been selected as the winning bidder for Celsius Network’s owned custody outfit, GK8. As announced by the company, the acquisition is a part of the divestment agenda of the bankrupt crypto lender and it is subject to regulatory approval.

GK8 provides a secure institutional digital asset self-custody platform that enables users to carry out transactions offline, a provision that guarantees protection for its users from cyberattacks. Should the acquisition be approved, GK8 will contribute to the expansion of the Galaxy Digital brand and will constitute the custody service outfit that stands as the missing piece in its bid to offer a complete suite of crypto service offerings.

“The acquisition of GK8 is a crucial cornerstone in our effort to create a truly full-service financial platform for digital assets, ensuring our clients will have the option to store their digital assets at or separate from Galaxy without compromising versatility and functionality,” said Mike Novogratz, Founder, and CEO of Galaxy. “Adding GK8 to our prime offering at this pivotal moment for our industry also highlights our continued willingness to take advantage of strategic opportunities to grow Galaxy in a sustainable manner.”

Galaxy Digital has long been in search of an institutional-grade crypto custodial service provider and it had the pact to acquire BitGo back in 2021. The deal fell apart when it called off the deal on accusations that BitGo refused to hand over its complete audited financial statement as of July 31 this year, thus breaching the contract.

The termination of the contract has fueled a lawsuit from BitGo, however, the lawsuit is not affecting the alleged hunt for a new worthy firm like GK8 to buy.

GK8 to Complement Galaxy Digital

Celsius Network acquired GK8 for $115 million last year and though the financial details of the Galaxy Digital acquisition remain undisclosed, the Tel Aviv-based startup is billed to play a very pivotal role within the Galaxy Digital brand.

Should the deal be approved, Galaxy Digital will be inheriting GK8’s outfit in Israel, as well as a team of nearly 40 people, including cryptographers and blockchain engineers. GK8’s founders CEO Lior Lamesh and CTO Shahar Shamai will remain with the firm and lead the new custody business that will spin off from this acquisition.

“We’ve vigorously worked to become the most secure platform of choice for financial institutions participating in the digital asset ecosystem,” said Lamesh. “We are excited by the prospect of joining one of the leading providers of financial and digital asset services to institutions who truly understand the impact of GK8’s custody technology on the future of blockchain. With the backing of Galaxy, we aim to introduce new and exciting offerings to the industry that showcase a combination of Galaxy’s best-in-class services and GK8’s cryptography, security, and unparalleled R&D skills.”

Amongst other things, GK8 will help solidify GalaxyOne, the bigger company’s trading platform.