Galaxy Digital to Acquire Celsius’ GK8, With Founders Retained

After much negotiation, Galaxy Digital and insolvent cryptocurrency lender Celsius have reached an agreement for Galaxy Digital to acquire GK8, a high-security custodian. The acquisition is contingent upon receiving necessary bankruptcy court approvals and satisfying other closing conditions. This is because the deal is being conducted in connection with the company’s Chapter 11 bankruptcy.

 As a result of Terra’s collapse, Celsius sought bankruptcy protection in July (LUNA). Galaxy will add about 40 workers to its workforce as a result of the acquisition.  Furthermore, Galaxy has retained GK8’s co-founders Lior Lamesh and Shahar Shamai to run its new custodial technologies division.

What is GK8 bringing to Galaxy Digital?

Banks and other financial institutions were already GK8 clients when it came to custody services. After the purchase by Celsius in November 2021 for $115 million, GK8 has maintained a good performance despite Celsius’ troubles. Galaxy says that the acquisition will allow it to provide its customers with comprehensive cryptocurrency services, including storage solutions.

In a statement, Galaxy Digital CEO Mike Novogratz said, “The acquisition of GK8 is a crucial cornerstone in our effort to create a truly full-service financial platform for digital assets, ensuring our clients will have the option to store their digital assets at or separate from Galaxy without compromising versatility and functionality.”

GK8 employs patented technology to store cryptocurrency offline and conduct blockchain transactions even when it is not online. Galaxy plans to back GK8 as they continue to provide innovative self-custody technology to the world’s top financial services firms. Also, they plan to use GK8’s custody solution as they continue to build out GalaxyOne.

Using the company’s tried-and-tested risk-management processes and a variety of custodial options, GalaxyOne is a new prime offering designed for institutional investors that combines trading, lending, cross-portfolio margining, and derivatives. In addition to assisting GalaxyOne and other institutional investors with self-custody solutions, GK8 will also continue to work directly with banks, trust firms, broker-dealers, and retail platforms to ensure the security of their customers’ digital assets.