One of the earliest Bitcoin custodians, Xapo, has decided to end its service to U.S. customers from March 1, 2021. The announcement was initially revealed in an email dated Dec. 30 to customers requesting to transfer their BTC holdings to an external address. The email also indicated that buying and receiving bitcoin within the app has also been disabled. Xapo is well-known for storing bitcoin in vaults in the Swiss Alps. The company allows customers to transfer funds to and from their vault through a mobile app or online interface.
Xapo to No Longer Serve U.S. Clients
In June, Xapo also announced discontinuing support for credit card payments for purchasing digital assets. The move came amid Xapo’s decision to transform into a digital bank.
As per a blog post from May 2020, founder Wences Casares highlighted that the banking custodian will soon transition into a digital banking service:
“Our target clients are people who have more than $30,000 in savings but less than $1 million who do not want to keep all of their savings in their local currency or in their country. Because of the amounts they have, they do not have access to international private banking services.”
Since attaining a banking license in Gibraltar, Casares mentioned that it would need a separate organization to comply with U.S. banking regulations, one that would require time, investment, and energy:
“Serving the US market would require quite a lot of effort, time, and investment, it would require a separate organization within Xapo to support it and it would still yield a worse product than what we can offer internationally.”
Xapo’s Advisors Include Notable Industry Leaders
Xapo was created after Casares first acquired bitcoin in 2011 and created a vault to store it. Upon receiving numerous requests from his friends, also institutions, requesting to store their bitcoin in his vault, Casares decided to found the company.
Prior to its acquisition by Coinbase, Xapo’s clients included Grayscale Investments. The firm’s advisors include Clinton administration treasury secretary Lawrence H. Summers, Visa founder Dee Hock, and former chairman and CEO of Citibank John Reed.