A man types on a computer keyboard in Warsaw in this February 28, 2013 illustration file picture. Photo: REUTERS/Kacper Pempel/File Photo.

CTech – American cryptocurrency exchange Coinbase has made its first acquisition in Israel, purchasing cryptographic key management and protection startup Unbound Security. Coinbase, which has a market cap of almost $69 billion, and Unbound refused to reveal the cost of the acquisition, but according to industry estimations it is believed to be more than $150 million. Coinbase will set up an Israeli R&D center based on Unbound’s infrastructure.

Unbound was founded in 2015 by world-renowned cryptographers Professor Yehuda Lindell, who serves as the company’s CEO, and Professor Nigel Smart. They were joined by Guy Peer who heads Unbound’s research and development team. The company employs dozens of people at its R&D center in Petah Tikva. The company has raised $40 million to date from the likes of Evolution Equity Partners, Innovation Endeavors, Goldman Sachs, Citi, and BlueRed Partners. Its most recent funding round was a $20 million Series B in November 2020.

Unbound’s key orchestration platform provides the cryptographic infrastructure to enable enterprises around the world to secure and manage all their information and digital assets. Data protection, privacy, authentication, and trust are all based on cryptographic keys. Unbound’s Multi-Party Computation (MPC) technology ensures keys are never exposed throughout their lifecycle, in any environment such as public and private cloud, virtual environments, containers, and on-premises.

In its press release, Coinbase wrote that Unbound “is a pioneer in a number of cryptographic security technologies, including the emerging field of secure multi-party computation (MPC), a highly advanced technology for which Unbound Security’s co-founder, Yehuda Lindell, is a world leader. With this acquisition, Coinbase not only gains access to some of the world’s most sophisticated cryptographic security experts with demonstrated ability to power secure key management at massive scale for the world’s largest financial institutions, but also a presence in Israel, a well-established and rapidly growing technology hub. This presence in Israel will add an additional powerful prong to Coinbase’s global talent acquisition strategy.”

Coinbase added: “Crypto can’t grow without strong cryptography and strong security, but it also needs to be user friendly. Secure multi-party computation is an application of advanced mathematics to enable crypto assets to be stored, transferred, and deployed more securely, easily, and flexibly than ever before. The crypto-economy is growing exponentially with myriad new use cases such as staking, DeFi, DAOs, and NFTs. Unfortunately, so are the threat vectors and complexities for participants to safely manage their crypto private keys. Technologies such as MPC will enable these groundbreaking use cases to come to life safely, securely, and in a way that’s user friendly.”

The American giant concluded: “In addition to the technological expertise that we will gain through this acquisition, we also plan to establish a tech Center of Excellence in Israel that will ensure that Coinbase is always at the bleeding edge of security and blockchain technology. We’ve long recognized Israel as a hotbed of strong technology and cryptography talent, and are excited to continue to grow our team with some of the best and brightest minds in these fields. The Unbound Security team will form the nucleus of this new research facility, which we plan to grow over time.”