The two companies said the deal is expected to be finalized later this year.

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“We are going to be integrating the Tagomi platform into our product suite and it will form the foundation for the future of our institutional trading business,” said Shan Aggarwal, head of corporate development at Coinbase.

In terms of how the integration will pan out, Aggarwal added: “Tagomi will continue to operate for the near future. We’re still thinking through long-term options.”

The purchase of Tagomi by Coinbase has been in the pipeline since last year when the deal was prematurely reported to have closed. A source familiar with recent developments said it was an “all-stock deal” and “significantly less” than the $150 million reported last year.

 Crypto prime brokerage, which offers institutional clients easier access to liquidity, custody, lending and other products, appears to be on a roll right now. Genesis Trading (owned by CoinDesk parent DCG) recently purchased crypto custodian Vo1t in a bid to become a prime broker, London-based Bequant launched a prime brokerage service earlier this month and BitGo also announced its prime brokerage play earlier on Wednesday.

Coinbase said the acquisition comes at something of an inflection point in the industry, with recent pronouncements by Paul Tudor Jones serving as a bellwether for bitcoin acceptance from leading hedge fund and macro investors. Coinbase also said it has seen a 100% increase in volume from professional and institutional traders over the past three months.

But some commentators will see the Tagomi deal as consolidation in a market that has turned out to be sluggish, at least as far as the eagerly awaited arrival of traditional institutional investment is concerned.

“We definitely all thought there would be more banking and asset manager interest, and Tagomi really built a product that would muster up to those people,” Tagomi co-founder Marc Bhargava told Coindesk.

According to certain reports, Tagomi has been on the hunt for new opportunities because its fees on trading volumes of around $1 billion a year were only adding up to about $1 million in revenue. 

Tagomi has had a focus on best execution, which involves pooling buy and sell orders across 10 or so large crypto exchanges, including Coinbase, Binance and Gemini, and then routing clients’ transactions to the venues offering the best prices. 

Asked if being owned by Coinbase created any kind of conflict of interest, Bhargava said he didn’t necessarily think so. 

“We think we will still be able to deliver really great pricing to our clients,” said Bhargava. “Obviously, we will still have market maker relationships. Over time, we’ll disclose which exchanges we continue to work with.”

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