Coinbase acquires Tagomi in a move to further build out its institutional prime brokerage

Leading U.S. retail exchange Coinbase has acquired institutional prime broker Tagomi in an all-stock deal worth “significantly less” than the $150 million reported earlier in the year according to Coindesk. The deal is the largest of Coinbase’s numerous acquisitions, with the most notable being Xapo which was bought last fall for $55 million. While it is yet to be finalized, the Tagomi acquisition is expected to close later this year.

Why it matters

• The race to become crypto’s leading prime brokerage is in full force as this announcement coincided with BitGo releasing their new entity BitGo Prime and comes one week after Genesis detailed their plans to transition to Genesis Prime.
• Rather than build out the array of capabilities expected of a prime broker these firms have sought to acquire companies to fill the void in either custody, lending, or trading. If other companies want to compete in this business they may need to similarly acquire smaller service providers, although the market is already becoming crowded.