Xapo has secured $20 million to secure the Bitcoins of their customers, TechCrunch reported.
The investment came from Benchmark Capital, Fortress Investment Group Llc and others. Wences Casares founded the company which had been operating in stealth for two years, keeping the digital currency of institutional clients safe and secure. Now, the company is providing the service to regular Bitcoin owners, the report said.
Casares told TechCrunch in an interview that the Bitcoins entrusted for their safekeeping are kept in cold storage vault. He said, "If you have one or a couple rogue employees there's not anything they can do to take the coins out of our vault. The coins that are in the vault are on servers that are never online - have never been online."
Proceeds from the round will be deployed towards putting the necessary security needed to keep the Bitcoin environment safe and secure. It will also be used to put sufficient security to persuade insurers that they need to pay in the event that the vault actually gets hacked, the report said.
Xapo's clients can access their coins by using private keys and these are under heavy guard found only in the world's deepest storage areas. To avail of their insurance service, users first create a Bitcoin wallet. They can then transfer their digital currency to a vault. Xapo earns by charging a custody fee amounting to 0.12% of the balance in your vault. In addition to keeping your Bitcoins safe, Xapo also provides insurance against theft and hacking, the report said.
Let's Talk Bitcoin Network Editor-in-Chief Adam B. Levine told TechCrunch, "In the wild west of Bitcoin, it's disorder that makes people realize just how much they want civilization. Private 'Vaults' are a natural response to Mt.Gox, the equal and opposite reaction, but I'm truly excited about these early insurance products. We're now seeing the evolution of the open source cryptocurrency experiment where the tokens are worth enough and the concept is viewed seriously enough to make it warrant professional, institutional-grade security and insurance."
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