BitGo has acquired the institutional trading division of Bitcoin broker NYDIG for an initial sale price of $42.5 million, according to an SEC filing cited by American Banker. The deal, announced on Friday, is expected to expand BitGo's institutional markets platform by enhancing its existing trading offerings. Approximately 30 NYDIG employees joined BitGo, along with NYDIG's existing institutional client trading relationships.
The transaction also includes promises for up to $15 million in cash upon achieving unnamed revenue milestones, plus $5 million each of cash and stock retention awards for transferred employees upon hitting revenue milestones. Stephen Aschettino, partner at Fox Rothschild and chair of the firm's fintech and digital assets division, described the deal as "a disciplined capital-allocation decision" for NYDIG, which retains its Bitcoin mining operations and a power-generation and high-performance-computing pipeline.
Aschettino said the acquisition is "a textbook example" of a digital asset infrastructure provider using its regulatory moat to build out a full-service institutional platform. Since receiving conditional approval from the OCC last December to convert to a federally chartered national trust bank, BitGo has been positioning itself as a single-counterparty solution for large allocators and financial institutions. Adding NYDIG's derivatives, structured-products, and financing capabilities fills what Aschettino called "the most conspicuous gap" in that offering.
What remains unknown is the current status of BitGo's national trust charter. The OCC and BitGo did not immediately respond to requests for clarification, according to American Banker. The unnamed revenue milestones tied to the additional payments were also not disclosed, leaving the total potential transaction value uncertain beyond the initial $42.5 million.