The acquisition comes one month after the crypto lender received a cease-and-desist order from Kentucky’s financial regulators. According to the regulators, the crypto accounts were in breach of the securities law. Also, the company allegedly failed to disclose to its clients what their deposits are used for. Likewise, clients were not told how much protection they had. We also reported that the crypto lender received a cease-and-desist order from New York regulators.
Following the cease-and-desist order, the cryptocurrency lender raised $400 million in equity funding. According to Alex Mashinsky, CEO of Celsius Network, the crop of investors was to help reassure regulators of the credibility of the enterprise. Now, it has used part of the equity funding to acquire a cybersecurity firm, GK8. Prior to the funding, the cybersecurity startup had only raised $10 million in the three years since its establishment. Of this, $4 million came as seed funding.
Celsius Network Interest in GK8 Strategic
GK8 provides an encrypted and safe platform for the management of digital assets. Additionally, the firm’s technology allows the initiation of blockchain transactions in the absence of a direct internet connection.
Lior Lamesh and Shahar Shamai, former cybersecurity experts at the office of the Prime Minister of Israel established the company. The company has a 20-man strong team and serves many financial institutions, banks, and crypto projects. eToro is one such example.
As a result of the acquisition, Celsius Network and GK8 will pool resources together. The fund will help provide an enterprise-grade custody platform for banks and financial institutions. The platform will shield the institutions offering digital asset services protection from cyber-attacks. Recall that cyberattacks have been plaguing the cryptocurrency ecosystem recently.
Celsius Network co-founder and COO Daniel Leon expressed his delight at the acquisition of GK. He said, “GK8’s capabilities will help Celsius and GK8 clients to enter new sectors in the blockchain space while maintaining and increasing cybersecurity capabilities.” Also, he noted that the acquisition will not affect the company’s independence but is a major step in the growing crypto ecosystem.