Today Gemini, the cryptocurrency firm founded by the Winklevoss twins, announced it had acquired digital asset custody technology firm Shard X for an undisclosed amount. To date, the London-based firm has raised a seed round of $650,000, according to Crunchbase.
Gemini has its own custody solution, Gemini Custody, but Shard X brings multiparty computation (MPC) technology. By using MPC there is no single key that can unlock a digital asset. Instead, a key is split into fragments that are distributed, making it hard to hack. Many of the leading digital asset custody firms use MPC. One of Shard X’s case studies is the use of its MPC technology by Entrust in its Hardware Security Modules (HSMs).
Gemini also uses HSMs in its existing custody solution, which takes care of $30 billion in crypto assets and has multiple layers of biometric access controls.
The acquisition will be merged into Gemini’s UK affiliate.
The digital asset custody space is a pretty hot acquisition area. In March PayPal acquired Curv for around $200 million. And last month, Galaxy Digital acquired BitGo for $1.2 billion. Meanwhile, numerous banks are gearing up for digital asset custody, including the largest conventional custodian BNY Mellon which invested in Fireblocks, also known for its MPC technology.
Three of the top five largest custodians – State Street, Citi and BNPPSS – are participating in Pyctor, the decentralized digital asset custody solution initiated by ING.