Komainu, the institutional crypto custody firm has received $75 million in strategic funding from Blockstream, the specialist Bitcoin developer. The digital asset custody firm is a joint venture between Nomura’s Laser Digital, security firm Ledger and asset manager Coinshares. We believe the last funding was a $25 million Series A round in 2021 led by Alan Howard’s Elwood Asset management.
The investment is in the form of Bitcoin and Komainu will hold Bitcoin as part of its treasury, with appropriate hedging.
Following the funding, Komainu will adopt several of Blockstream’s Bitcoin linked technologies. One is the Liquid Network, a Bitcoin sidechain targeting security token issuance that has been around for years. Blockstream itself has used it for issuances, as has Bitfinex, the cryptocurrency exchange associated with Tether. When El Salvador issued a Bitcoin Bond, it used Liquid. Plus, in 2021 Daiwa Securities trialed a corporate bond issuance on the network.
Liquid Network v Lightning Network
The Liquid Network is not to be confused with the Lightning Network which is also a Bitcoin Layer 2 solution, which is used for payments. In fact, Blockstream has its own implementation of the Lightning Network, Core Lightning.
Komainu plans to use the Liquid Network for its off-exchange margining & settlement solution, Komainu Connect. It reckons it will dramatically cut timing from hours to minutes. Connect provides triparty agreements similar to traditional finance (TradFi). This avoids clients needing to transfer assets to exchanges and means Komainu confirms to a trading venue that the assets are held under custody in a segregated account.
“I am confident this will be the first of many such use cases as the institutional community wakes up to the power of the Lightning and Liquid Networks,” said Adam Back, CEO of Blockstream.
Additionally, Komainu will adopt Blockstream AMP which enables users to tokenize assets by connectivity to the Liquid Network via APIs. The custody firm will also integrate other Blockstream technologies, including its enterprise HSM.
“At Komainu we believe in offering our clients a wide choice of technology options and this partnership with Blockstream will maximise efficiencies and lower latencies across the various services that we offer,” said Robert Johnson, Co-CEO & CTO at Komainu.
Meanwhile, in October Komainu expanded its presence from the UK and UAE to Singapore with the acquisition of Propine.
