BitGo Acquires Harbor in Surprise Expansion Beyond Crypto Custody

SOME ASSEMBLY REQUIRED: "As we build the market infrastructure for crypto there's a lot of pieces to put together," says BitGo CEO Mike Belshe.

BitGo is expanding beyond crypto custody with the takeover of a onetime poster child of the adjacent market for digital securities.

The crypto custodian announced Tuesday the acquisition of Harbor, a security token platform best known for a failed bid to offer tokenized shares of a South Carolina apartment building.

The move allows BitGo to expand its services from custody, becoming what CEO Mike Belshe said is the first "Full-stack" service provider in the digital securities space.

The acquisition essentially allows BitGo to recreate all parts of the traditional financial system, Belshe said, noting that BitGo itself is a licensed custodian through the South Dakota Division of Banking.

Qualified custodians can store securities on behalf of clients, including institutions; broker-dealers can trade these securities for themselves or for clients; and transfer agents act as intermediaries who help record transactions, among other duties.

While Belshe did not say how much the company holds in assets under management, he said BitGo conducts some $15 billion in transactions each month, including through its international clients.

The sale marks a turning point for Harbor, which originally set out to help other companies issue security tokens before later focusing on facilitating the tokenization of existing securities.

"One piece that we've been missing is custody. We've had a partnership with BitGo and so when you're under the same roof things become possible, you make things more integrated than you could before, we're exploring that now with BitGo, we're trying to figure out what exactly the roadmap looks like," said Josh Stein, Harbor's CEO.While Stein is also joining BitGo, his exact role has not yet been defined.

BitGo plans to expand the number of assets it supports, particularly with security tokens, but Belshe said he could not specify which tokens this might include, citing regulatory ambiguity.