Coinbase Buys Tagomi to Boost Institutional Trading

Coinbase, a leading US-based crypto exchange, has officially announced on Wednesday its acquisition of Tagomi, a crypto prime brokerage platform.

With this, the crypto exchange is planning to bolster its offerings to advanced traders and sophisticated crypto investors.

Neither of the companies are disclosing the terms of the deal; however, Coinbase confirmed that it would be finalized later this year.

“The addition of Tagomi will round out our product suite for the fast-growing institutional trading market,” Coinbase wrote. “It will allow us to offer custody, professional trading features, and prime brokerage services on one platform, giving sophisticated investors the seamless, powerful trading experience they have come to expect in equities and FX markets.”

Rumors in the market around the deal

Last November, rumors circulated in the media that Coinbase acquired Tagomi for $150 million. However, the exchange’s communications head publicly denied any such claims or its interest in Tagomi.

Tagomi was co-founded by former HFT technologists, including Greg Tusar, global head of electronic trading at Goldman Sachs, and Jennifer Campbell from Union Square Ventures.

The startup operates as a Prime Broker Prime Broker Prime brokers are the designation given to individuals handling a package of services offered by investment banks, wealth management firms, and securities dealers to hedge funds which need the ability to borrow securities and cash in order to be able to invest on a netted basis and achieve an absolute return.There are two types of prime brokers - bank and non-bank corporations. Traditionally major global investment banks have been the predominant players in the space, however recent years have p Prime brokers are the designation given to individuals handling a package of services offered by investment banks, wealth management firms, and securities dealers to hedge funds which need the ability to borrow securities and cash in order to be able to invest on a netted basis and achieve an absolute return.There are two types of prime brokers - bank and non-bank corporations. Traditionally major global investment banks have been the predominant players in the space, however recent years have p Read this Term in the crypto space, aggregating Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term across multiple exchanges and executing trades based on a single unified order book.

Apart from its prime brokerage offerings, Tagomi also launched lending and borrowing services.

In two years of its establishment, the prime brokerage raised $28 million from venture capitals, including Pantera Capital, Paradigm, and Dragonfly Capital Partners, according to Crunchbase.

Though Coinbase confirmed Tagomi’s operation in the near future, it is still thinking about the startup’s long-term options.

A crypto unicorn

Coinbase popularized itself as the provider of crypto-fiat exchange and wallet platform. Over the years, the San Francisco-headquartered company expanded into many other areas, including crypto custody and even data oracle services.

“We’re proud to build the foundation for the next wave of crypto investors by bringing onboard the first electronic prime brokerage in crypto,” Coinbase noted. “Even in a time of uncertainty, we view now more than ever as the time to push forward our mission of building the crypto-economy.”