- Reports that Goldman Sachs will rely on Bakkt’s technology for its potential crypto custody product are inaccurate, The Block has learned
- Goldman is not planning to build a crypto custody product on Bakkt
- The investment-banking giant might trade on its platform, however.
Wrong information can travel around the world before the truth laces up its boots, as the saying goes.
And that’s certainly the case in the world of crypto, where information overload, false reports, and flat out scams are omnipresent. This week, Goldman Sachs was the latest victim of unverified crypto reports. The Abacus Journal, formerly ICO Journal, reported that a Goldman Sachs crypto custody product “will rely” on Bakkt, the crypto platform run by Intercontinental Exchange. “Goldman Won’t ‘Go It Alone’ With Crypto Custody Product; Will Rely On Bakkt Infrastructure,” the report’s headline read.
The Block has learned from a direct source that the Abacus Journal report is not accurate. That story and related reports were tweeted by high-level crypto personalities, including the CEO of Binance, and was followed by other reports. Here’s what we know:
- Goldman Sachs is not planning to build a crypto custody product relying on Bakkt’s infrastructure.
- No such conversations on this matter have occurred.
- That being said, Goldman Sachs could potentially trade futures on Bakkt. And conversations between the two firms on this matter will likely occur.
Bakkt, which was announced in August by Intercontinental Exchange, the parent company of NYSE, is set to launch in December, CEO Kelly Loeffler confirmed to Fortune in an interview. A source told The Block the specific date is December 12. To start, Bakkt will offer a physically delivered bitcoin future, which would compete with bitcoin futures trading on CME Group and Cboe Global Markets. Goldman Sachs clears bitcoin futures traders for its clients. As for Goldman Sachs, the firm has been exploring a crypto custody for hedge fund clients, as Bloomberg News reported in August.
The real news Thursday for Goldman is that the firm invested in crypto custody firm BitGo’s Series B fundraising round, alongside Mike Novogratz’s Galaxy Digital Ventures. BitGo has raised $70 million to date and is providing custody services for more than 75 cryptoassets.
“Greater institutional participation in the digital asset markets requires secure and regulated custody solutions,” said Rana Yared, a managing director of Goldman Sachs’ Principal Strategic Investments group, in a statement to The Block. “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.”
The investment indicates that if Goldman Sachs were to partner with a firm on its custody product, BitGo would likely be a partner over Bakkt.
With assistance from Larry Cermak.