BitGo on Monday announced the launch of its new vault service to let institutional investors waddle into DeFi services such as lending. The aim, BitGo said, to organize access to on-chain lending through its own established platform, familiar to a userbase of over a million members.
Announcing the service on Monday, the U.S.-based company said its DeFi vault service has been developed in collaboration with third-party infrastructure providers and risk managers.
BitGo, as part of the service, will hold and maintain the user’s “receipt tokens” as proof of the deposited money, in its regulated national trust bank. The company had received its approval from the OCC to run this federally chartered national trust bank in December last year.
“We believe institutions are looking for ways to access onchain opportunities but also expect the security and oversight that come with institutional custody. BitGo’s DeFi vaults bring these pieces together,” said Mike Belshe, CEO and Co-founder of BitGo.
Morpho, a DeFi lending protocol, has been onboarded as a partner with BitGo to collaborate on this service. The platform will provide the underlaying smart contracts and technical systems to execute loans on blockchain.
“Through Morpho’s credit network, institutions can access third-party onchain lending markets through infrastructure that can be accessed using BitGo’s institutional workflows,” said Paul Frambot, CEO and Co-founder of Morpho.
BitGo clients will be aligible to earn rewards on idle assets via curated Morpho Vaults,.
In January this year, BitGo went public on New York Stock Exchange (NYSE) and raised $212 million at a valuation of over of $2 billion. In June, the platform also made its way into the Fortune 500 list.
While BitGo is making strides with back to back developments on paper, it has recently found itself in a fresh legal challenges in the U.S. Last week, the Schall Law Firm filed a a class action lawsuit against BitGo Holdings, Inc. claiming violations of afederal securities law. BitGo has been accused of allegedly making false and misleading statements to the market at the time of its IPO.
“BitGo downplayed the risk of declining digital asset prices as it touted its financial performance and business prospects. Based on these facts, the Company’s public statements were false and materially misleading throughout the IPO period. When the market learned the truth about BitGo, investors suffered damages,” said the law firm announcing the development on June 19.
BitGo’s response to the development has not made it to public forums as of now.
