Unchained Capital raises $60 million to expand its Bitcoin financial services

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Unchained Capital Inc., based in Austin, Texas, today announced that it has raised $60 million in new funding to expand its financial services to bitcoin holders during chaotic markets.

The Series B funding round was led by Valor Equity Partners, known for its early investments in SpaceX and Tesla. The round closed earlier in April with participation from existing investors including NYDIG, Trammell Venture Partners, Ecliptic Capital and Highland Capital Partners. It builds on the $15 million raised by the company in the fall of last year, led by Ten31.

Unchained Capital uses what is called a collaborative custody model for bitcoin holders to store their cryptocurrency. The company’s solution uses underlying technology in bitcoin that allows multiple parties to hold private keys and share control of bitcoin holdings among themselves, Unchained, or other financial companies.

The technology uses a multi-signature concept which essentially requires more than one party to agree to move the cryptocurrency before anything can happen. Unchained and any other financial institution cannot act on the cryptocurrency held without the agreement of the other signatory, which helps to eliminate dangers such as theft or loss of keys, but also prevents that anything either happens to the assets if something happens to one of the signatories.

The recent collapse and bankruptcy of crypto exchange FTX Trading Ltd. and other centralized crypto companies have proven that custodianship of cryptocurrency with companies can lead to token loss. However, if they are signed by multiple parties, it reduces the risk that they could simply be moved or used without permission – or someone simply ran away with them.

The company claims to secure over $2 billion in bitcoin assets on thousands of keys around the world. Among its financial services, it provides loans secured by bitcoins and has granted more than $500 million in loans since 2017, without any losses. The company also offers a dealing desk allowing customers to buy bitcoin directly from a cold store (a multisignature vault) and also offers an Individual Retirement Account offering that allows customers to hold bitcoin keys in tax-advantaged accounts.

Amid the market chaos, Unchained has become a highly trusted provider of bitcoin financial and custody services through superior technology, risk management, regulatory compliance and customer service, said Vivek Pattipati, Partner at Value. Particularly in lending, the company has differentiated itself by minimizing risk to lender and borrower, which has led to resilience and tremendous opportunity to capture market share.

Unchained plans to use the funds to grow its customer base and expand its product offerings, particularly as bitcoin given the recent turmoil in the bitcoin market. General Manager Joe Kelly said the funds will be used to double down on the product suite and tackle long-requested features, upgrades, security features and quality of life improvements.

A portion of the funds will also be used to capitalize on the growing adoption of bitcoin, keeping tabs on how people are exchanging bitcoin for dollars. In light of this, Unchained Capital intends to start offering dollar-based products such as checking accounts and credit cards.

By using this new capital investment to expand our reach and range of services, Kelly said, we hope to enable new entrants to bitcoin to transition centralized custodians to our more secure collaborative custody model.

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