Bitcoin thefts and financial troubles at exchanges that trade the digital currency are opening the doors to a Silicon Valley startup called Xapo, which boasts physical underground vaults in secret locations guarded by armed guards.
This week, Xapo announced that it has raised $20 million from investment firms Benchmark, Fortress Investment Group and Ribbit Capital.
Wences Casares, founder and CEO of Xapo, says he saw the promise of Bitcoin, having been raised in Argentina, an economy that has seen annual inflation of 12,000%.
“I believe a digital currency like Bitcoin could solve the disjointed nature of our global economy,” Casares said, according to Xapo’s statement on the fundraiser.
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Casares says the computer drives storing your bitcoin code would be in underground multi-story offline servers with 24/7 monitoring, safe from hackers or other thieves. The company declined to share photos of its security measures or vaults, which it says are located on different continents.
A company spokesperson told ABCNews.com that there is no particular story behind Xapo’s name.
Based in Palo Alto, Calif., and incorporated in Hong Kong, the company says it has about 2,000 clients, including hedge funds and other financial institutions, the the wall street journal reports.
Xapos earns money via an annual fee of 0.12% for each deposit you make into the vault. In the “highly unlikely” event that an illegal action affects your bitcoins, or even if Xapo declares bankruptcy, the startup says it is fully insured and backed by Meridian Insurance.
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If you want to withdraw bitcoins, the company says on its website that it will use “multiple layers of security” to verify the request and can transfer the money to you within 24 hours.
A Xapos spokesperson told ABCNews.com that it is a “physical process that involves a Xapo employee entering the safe after verifying that it was you who ordered the transfer”.
Matt Cohler, Benchmark’s general partner, said in a statement that investing in Xapo was “a no-brainer.”
“We all want to support great entrepreneurs who aspire to change the world. We aspire to help them and their businesses realize their full potential. Wences is one of the world’s great entrepreneurs,” Cohler said in a statement. , citing Casares. “personal passion” and “deep professional expertise around Bitcoin and financial services”.
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