Coinbase Expands Institutional Services With Tagomi Purchase

(Bloomberg) -- Coinbase Inc., the largest U.S. cryptocurrency exchange, is expanding its services for institutional investors with the acquisition of digital brokerage Tagomi.

Tagomi’s platform is able to automate crypto trades valued at millions of dollars that many other firms still execute manually. Customers include family offices and crypto funds such as Pantera Capital, Bitwise and Multicoin Capital.

Terms of the agreement weren’t disclosed. Tagomi was started in 2018 with backing from Founders Fund, Collaborative Fund and Digital Currency Group, among other investors. Its management includes co-founder Greg Tusar, a former global head of electronic trading at Goldman Sachs Group Inc.

“If I wanted to buy $100 million of Bitcoin, we bring the tools to Coinbase to allow users to execute more efficiently,” Tusar said in an interview. “Coupled together with custody and deep liquidity in the Coinbase liquidity pool, together with the existing OTC operation, that’s a combination of things that no one else has.”

The acquisition is pending regulatory approval. Tusar and his two co-founders, along with most of Tagomi staff, will transition to San Francisco-based Coinbase, he said.

Coinbase said it has seen a 100% increase in trading volume from professional and institutional traders in the last three months, as compared with the previous 90 days. The growth coincided with a steep drop in Bitcoin’s value in mid-March, followed by a steep rally.

Coinbase has been building out its institutional offerings, adding features such as margin trading and new tools to let investors segregate their strategies. It also recently added Brett Tejpaul as head of institutional coverage.

“The thing we are really focused on is getting a world-class trading platform,” said Emilie Choi, chief operating officer at Coinbase.

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