Goldman Sachs Investing in Crypto Custodian BitGo

Siamak Masnavi

Goldman Sachs and Mike Novogratz' venture capital fund Galaxy Digital Ventures are investing in crypto custody solution provider BitGo Holdings.

Here is how BitGo, which calls itself "the market leader in institutional-grade cryptocurrency security", announced the news on Twitter:

And Mike Novogratz, the founder of Galaxy Digital, made the following tweet (note the #theherdiscoming hashtag, which refers to the flow of institutional money into crypto):

According to the press release, today, BitGo had the second close of its Series B funding round. The new investors, Goldman Sachs’ Principal Strategic Investments group and Galaxy Digital Ventures LLC, a VC firm founded by Michael Novogratz (a former partner at Goldman Sachs) are joining Valor Equity Partners, Craft Ventures, DRW, and Redpoint Ventures. The total amount raised in this round was $58.5 million. This funding will help to support BitGo’s research and development.

Mike Belshe, CEO of BitGo, said:

“This strategic investment from Goldman Sachs and Galaxy Digital Ventures validates both our market opportunity and unique position. No one is better positioned than BitGo to serve institutional investors who want to trade cryptocurrencies and digital assets. That’s why we’re focused on figuring out what it takes to secure a trillion dollars. The market’s not there yet but our job is to be ready first."

Rana Yared, a Managing Director of Goldman Sachs’ Principal Strategic Investments group, stated:

“Greater institutional participation in the digital asset markets requires secure and regulated custody solutions. We are impressed by BitGo’s product, unique services, and the management team. We view our investment in BitGo as an exciting opportunity to contribute to the evolution of this critical market infrastructure.”

And Michael Novogratz, Founder of Galaxy Digital Ventures LLC, had this to say:

“Institutional investors are gradually realizing that digital assets are going to be a game changer, and they want to participate. We have been impressed with BitGo’s world class team, their deep technical understanding of digital assets as well as their ability to deliver institutional-quality products to investors. Our team is excited to support BitGo as it enters into this next phase of growth.”

On 13 September 2018, as covered by CryptoGlobe, BitGo announced that it had become a "qualified custodian" by obtaining a South Dakota trust charter, which made it even more attractive to institutional investors.

BitGo's "BitGo Custody" solution for institutional investors offers:

  • 100% cold storage technology in bank-grade Class III vaults;
  • Support for storage of over 75 tokens and coins;
  • Institutional-grade policy controls (such as multiple signatures and spending limits);
  • Multi-user accounts; and
  • Most importantly, regulatory compliance (since BitGo Trust Company is a qualified custodian)

BitGo is the largest processor of on-chain bitcoin transactions, with 15% of all global bitcoin transactions, and $15 billion per month across all cryptocurrencies; it supports more than 95 coins and tokens; it holds more than $2 billion in assets in custody; and it is used by hundreds of exchanges across more than 50 countries.

Featured Image Courtesy of BitGo 

Runescape Hakcers Use Glitch to Make Trillions in Game and Use Profits to Buy Bitcoin

Michael LaVere
  • Runescape hackers were able to exploit a double-spend glitch to generate trillions in in-game currency and use the profits to buy bitcoin.
  • Community members have suggested publisher Jagex consider adopting bitcoin or another crypto-asset to resist double-spend attacks.

Runescape hackers were able to exploit a double-spend glitch to generate trillions in in-game currency and use some of the profits to buy bitcoin. 

According to a video published by popular YouTuber SirPugger, the exploit began in November 2019 with the hackers crashing the Old School Runescape’s economy via the creation and use of thousands of new accounts. Runescape’s servers responded to the account overload by rolling back to the last login point. 

Hackers were able to exploit the roll-back by trading gold between two accounts while only logging out of the account which received the gold. According to the video, the rollback would result in both accounts holding the gold, resulting in a double-spend attack. 

While Jagex, the publisher of Runescape, patched the exploit for Old School Runescape, the hackers were able to employ a similar double-spend attack on Runescape 3. 

The video claims the hackers were able to continue the exploit for several days before Jagex was finally able to fix the rollback mechanic, racking up trillions in double-spend game currency in the interim. 

SirPugger said, 

I can tell you we’re talking about multiple trillions of Runescape 3 dupe, which translates to over $250,000.

The hackers attempted to offload their in-game currency through multiple avenues, including gambling and exchanging for bitcoin. 

Some community members have proposed Jagex consider adopting bitcoin or other crypto-assets for their in-game currency and leveraging the blockchain technology to provide resistance against double-spend attacks. 

Featured Image Credit: Photo via Pixabay.com