Xapo, a Hong Kong-based bitcoin wallet provider, allegedly holds approximately 7% of the world’s entire Bitcoin supply in its vaults. At the time of writing, this portion equates to a rough – and whopping – $10 billion USD, according to a report from Bloomberg.
The report says that Xapo has spent time building a thorough network of underground vaults on five of the seven continents, “including one in a decommissioned Swiss military bunker” and in these chambers lie the wealth of years of storing the cryptocurrency – racking up the startling amount. The startup, which only formed in 2014, made headlines with the Swiss bunker’s bitcoin make-over towards the end of last year. Xapo had also previously had issues with regulations when it moving from Switzerland to the US.
Bloomberg reports that the startup “has more “deposits” than 98 percent of the roughly 5,670 banks in the U.S” but still has trouble with the regulators owing to the fact that custodians are treated differently.
Not everyone has the same take as regulatory authorities, though, and Ryan Radloff from cryptocurrency investment and research company Coinshares has expressed his point of view on the matter saying that “[everyone] who isn’t keeping keys themselves is keeping them with Xapo,” and that “[you] couldn’t pay [him] to keep it with a bank.” Coinshares currently has an estimated $500 million USD worth of Bitcoin stored at Xapo.
The concept of storing the cryptocurrency in a locker is attractive to some – if the key to a wallet is stored on an electronic device it is at the risk of a hacker stealing it, but “cold” storage (an offline manner of keeping one’s key, such as on a thumb drive) greatly reduces the risk. Bloomberg reports that Xapo’s plan to resolve, or at least attempt to counter, this issue is to “bury a cold-storage device in a mountainside and layer on electronic safeguards.”