Coinbase Global Inc. has acquired Israel-based cryptographic security firm Unbound Security.
With the acquisition, Coinbase gains not only some of the world’s most sophisticated cryptographic security experts, but also a presence in the rapidly growing technology hub that is Israel.
Among the talent acquired by Coinbase, Unbound Security co-founder and current Vice President of Research and Development Guy Peer will bring his more than 20 years of experience in cryptographic security. Meanwhile, Unbound Security’s co-founder, Yehuda Lindell, is a pioneer in the emerging field of secure multi-party computation (MPC).
According to the announcement, “secure multi-party computation is an application of advanced mathematics to enable crypto assets to be stored, transferred and deployed more securely, easily and flexibly than ever before.” Coinbase said MPC provides the impenetrable nature of cold storage while still allowing the convenience of a hot wallet.
Developing global presence
Coinbase also emphasized the benefit of gaining a foothold in what it perceives to be a developing regional hub for crypto. Recognizing “Israel as a hot bed of strong technology and cryptography talent,” Coinbase said that the Unbound Security team would form the core of a new research facility that it plans to grow there over time.
This development in Israel is the latest in Coinbase’s recent global talent acquisition strategy, purchasing more than 13 companies this year, and engineering talent bases in places such as India, Singapore and Brazil. For instance, Coinbase purchased India’s Agara to improve its customer service earlier in November.
In addition to expanding geographically, Coinbase is also seeking to diversify its product offerings and sources of revenue in order to provide more sustainable growth. Coinbase said it also wants to focus more on customer service, since retail monthly transacting users dropped to 7.4 million, from 8.8 million in the second quarter, and the exchange makes most of its money off of retail trading fees. Coinbase concluded the third quarter with $6.4 billion in cash and equivalents, which also included roughly $2 billion in net proceeds from issuing senior notes in September.
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