There is no such thing as a boring day in the world of cryptocurrency. Kraken, one of the largest exchanges in Europe and the US, is phasing out BitGo integration. This is a rather worrisome development, considering BitGo is the leading industry provider of multisignature wallet solutions. Kraken claims to be moving to a completely different system altogether, although it remains to be seen if the company will be successful in doing so.
No More BitGo for Kraken
The top priority for any cryptocurrency exchange is to ensure customer funds are safe at all times. In most cases, these platforms opt for a multisignature cold storage solution, which is often provided by the BitGo company. This particular business has been at the forefront of securing cryptocurrency and digital asset holdings for quite some time now. However, it seems there is some sort of an impasse between this company and Kraken right now.
More specifically, Kraken sent out an email to customers last night explaining that everyone would need to generate a new Bitcoin deposit address moving forward. At first, a lot of people assumed this had been a phishing email sent out by scammers. After all, it hadn’t been mandatory to change one’s Bitcoin deposit address on Kraken for as long as most people could remember. However, it turns out this decision was legitimate.
To be more specific, Kraken is officially phasing out its relationship with BitGo. This is a somewhat troublesome turn of events, to say the very least. A lot of Kraken customers will not be all that happy with this decision, as they see BitGo as the industry leader for secure wallet solutions. Switching over to an alternative solution during a critical moment in Bitcoin history isn’t necessarily something most people will appreciate whatsoever.
According to the email, the company is moving Bitcoin and Tether funds to a different service offering similar benefits with multi-party signing. It is unclear which company or service that is exactly, though. It is important to note this decision has nothing to do with Kraken users losing funds or anything like that. Instead, this decision is seemingly part of a bigger move orchestrated by the exchange provider. It seems this decision has been in the making for quite some time now.
There is a chance all of this is the direct result of the ongoing political debate involving the SegWit2x hard fork. BitGo has been an outspoken supporter of this particular hard fork, even though the rest of the Bitcoin community hasn’t taken too kindly to the initiative so far. Do keep in mind this latter point has not been officially confirmed by either company, although it is a very distinct possibility given the current shenanigans taking place.
It will be interesting to see if other exchanges decide to drop BitGo as well moving forward. If Kraken’s choice was due to a difference in opinion regarding SegWit2x, it is not an unlikely scenario. Then again, nothing has been set in stone just yet and there are still plenty of things which could change in the future. Kraken is sending a very strong signal to the rest of the Bitcoin community, though; that much is evident.