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Xapo is a Switzerland-based company that provides a bitcoin wallet combined with a cold storage vault and a bitcoin-based debit card. Xapo CEO and entrepreneur Wences Casares became interested in bitcoins because of the frequent financial fluctuations in his native Argentina.

Xapo announced $20 million Series A funding in March 2014. The funding round was led by Benchmark, with participation from Fortress Investment Group, Pantera Capital, and Ribbit Capital. Benchmark partner Matt Cohler said the VC firm backed Xapo in part because Xapo “is led by one of the most important people in the bitcoin ecosystem, it’s insured and has investors from both Silicon Valley and Wall Street.”

The company has raised a total of $40 million as of August 2014.

Full Reserve Banking

The Xapo vault holds client bitcoins following a Full Reserve Banking and fully segregated model. Users can verify that their funds are in an individual multi-signature Bitcoin address and not pooled or co-mingled with other users' funds. Legal title to vault bitcoins is always users', with the property registered in their name following the model of allocated (bailment) gold storage and never loaned, invested or put at risk. In case of Xapo going bankrupt or going through a process of liquidation, bitcoins in the vault would be completely insulated and vault users would have clear title to them.

Transformation into bank

On May 5th 2020 Xapo announced that it would be transforming into a digital bank as the result of its obtaining a banking license in Gibraltar. This implied a change to its services as a Bitcoin wallet and increased regulatory hurdles and KYC for its existing clients. Xapo blocked new account openings after the announcement as it remodeled its platform. It also removed several app features (such as in-app chat and payments). A number of countries were also expelled or blocked from the platform.