Xapo

XAPO Ltd
Headquarters Zurich, Switzerland
Area served Worldwide
CEO Wences Casares
Key people Federico Murrone (COO)
George M. Rogers (President)
Félix Moreno (CFO)
Industry Financial Services
Products debit cards, Bitcoin
Services Bitcoin wallet, vault, debit card, currency exchange
Website xapo.com
Launched March 2014

Xapo is a Switzerland-based company that provides a bitcoin () wallet combined with a cold storage vault and a bitcoin-based debit card.[1][2]

Xapo CEO and entrepreneur Wences Casares became interested in bitcoins because of the frequent financial fluctuations in his native Argentina.[3] He has said that his family’s finances were “devastated as the economy (in Argentina) rocketed from inflation to deflation to devaluation.”[3] Casares believes that digital currencies such as bitcoin “could solve the disjointed nature of our world economy.”[4]

In 2011, Casares bought his first bitcoins but couldn’t find a way to store them, so he built a ‘vault’ for his own use.[1] Friends, and later financial institutions, soon asked Casares if they could store their bitcoins in his vault.[1] This became the foundation for Xapo, which was founded in late 2013 by Casares and COO Federico Murrone.[1] Xapo opened its products to the public in March 2014.[1]

Casares said Xapo was founded with the aim of making the bitcoin currency more secure and accessible.[3] The Xapo Wallet operates through a mobile app and online and includes the ability to transfer funds to and from the Xapo Vault.[3] In April 2014, Xapo introduced a debit card that will link to the user’s Xapo Wallet and will function like a standard debit card, except that it is backed by bitcoins instead of traditional currency.[2]

Prior to Xapo, Casares founded and later sold online brokerage firm Patagon to Banco Santander for $750 million.[5] He also launched the first Internet provider in his home country of Argentina in 1994.[6]

In May 2015 Xapo moved its headquarters from Palo Alto, California to Zurich in Switzerland.[7]

Security

The Xapo Vault consists of physical servers located around the globe that the company says is protected by biometric scanner access, 24-7 video surveillance, and armed guards.[1][2][4] The servers are in undisclosed locations underground, according to Casares.[8] Casares claims that Xapo “is the first bitcoin vault fully protected and insured against hacking and bankruptcy.”[1] The Xapo Vault is insured by Meridian Insurance.[8]

In August 2014, Xapo announced it had raised $20 million to further enhance its security measures.[9]

Full reserve banking

The Xapo vault holds client bitcoins following a full reserve banking and fully segregated model. Users can verify that their funds are in an individual multi-signature Bitcoin address and not pooled or co-mingled with other users' funds. Legal title to vault bitcoins is always users', with the property registered in their name following the model of allocated (bailment) gold contracts and never loaned, invested or put at risk. In case of Xapo going bankrupt or going through a process of liquidation, bitcoins in the vault would be completely insulated and vault users would have clear title to them.

Funding

Xapo announced $20 million Series A funding in March 2014.[3] The funding round was led by Benchmark, with participation from Fortress Investment Group, Pantera Capital, and Ribbit Capital.[3] Benchmark partner Matt Cohler said the VC firm backed Xapo in part because Xapo “is led by one of the most important people in the bitcoin ecosystem, it’s insured and has investors from both Silicon Valley and Wall Street.”

The company has raised a total of $40 million as of August 2014.[9]

Controversy

Xapo CEO, Wences Casares, has been sued for fraud by identity theft security firm LifeLock, which acquired Lemon, a digital wallet company led by eventual Xapo founder Casares. LifeLock alleges Casares and his team developed the source code for Xapo using Lemon’s computers, property and resources, all while getting paid by Lemon.[10] LifeLock has pulled the Lemon Wallet app from availability and taken the unusual step of deleting all data stored by current users after it deemed the app non-compliant with security standards. “We have determined that certain aspects of the mobile app may not be fully compliant with payment card industry (PCI) security standards,” said LifeLock CEO and Chairman Todd Davis."[11]

See also

References

  1. 1 2 3 4 5 6 7 Sreeharsha, Vinod (14 March 2014). "Start-Up Seeks to Capitalize on Security Concerns for Bitcoins". The New York Times. The New York Times. Retrieved 20 June 2014.
  2. 1 2 3 Rusli, Evelyn M. (24 April 2014). "First Bitcoin Vaults, Now Xapo Debuts Debit Cards". Wall Street Journal. Wall Street Journal. Retrieved 20 June 2014.
  3. 1 2 3 4 5 6 Swisher, Kara (13 March 2014). "Lemon Digital Wallet Founder Wences Casares Gets $20 Million in Funding for Bitcoin Startup Xapo". Re/Code. Re/Code. Retrieved 20 June 2014.
  4. 1 2 Kim, Suzanne (14 March 2014). "Underground Vault Offers Bitcoin Protection With Armed Guards, Biometric Scanners". ABC News. ABC News. Retrieved 20 June 2014.
  5. ↑ O'Neil, Lorena. "For Micky Malka, It's All About the Money". www.Ozy.com. Ozy. Retrieved 15 October 2014.
  6. ↑ n/a, n/a. "Wenceslao Casares – Person Details". www.crunchbase.com. Crunchbase. Retrieved 15 October 2014.
  7. ↑ http://www.itreseller.ch/Artikel/80016/Bitcoin-Verwalter_Xapo_verlegt_Hauptsitz_in_die_Schweiz.html
  8. 1 2 Calouro, Eric (13 March 2014). "Secure Bitcoin Storage Vault Xapo Ltd. Raises $20 Million in Funding". NewsBTC. NewsBTC. Retrieved 21 June 2014.
  9. 1 2 Popper, Ben (2014-08-29). "Meet the man building the Fort Knox of bitcoin". The Verge. Retrieved 1 October 2014.
  10. ↑ http://www.bizjournals.com/phoenix/blog/techflash/2015/08/lifelock-lemon-founder-locked-in-dueling-lawsuits.html
  11. ↑ http://thenextweb.com/apps/2014/05/17/lifelock-wallet-pulled-user-data-deleted-security-concerns/
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