Regulated U.S.-based cryptocurrency exchange Coinbase is in advanced talks to buy custody provider Xapo for about $50 million to boost its custody business, people familiar with the matter said on Thursday. Xapo’s CEO Wences Cesares is a serial entrepreneur from Argentina known to be one of the biggest champions of bitcoin from its earliest days.

Sources cautioned that the deal has yet to close, and requested anonymity due to the confidentiality and fluid nature of the talks.

According to sources, Coinbase and Fidelity Digital Assets have been locked in a neck-and-neck race for the prized asset for the past few weeks, with Coinbase ultimately prevailing. If the tentative terms being discussed hold, Coinbase will pay ~$50 million in cash for Xapo, plus a contingent earn-out for remaining with the company. Xapo raised $40 million since its founding in 2012.

Fidelity Investments has looked to bridge crypto and traditional finance by launching Fidelity Digital Assets and bringing on Tom Jessop as head of corporate business development last year. Jessop has a background in traditional finance and has made forays into the world of Blockchain startups. However, sources say Coinbase beat Fidelity to the sale, making a move that likely indicates the crypto giant is looking to aggressively diversify its revenue to be less prone to the cyclical nature of cryptocurrency trading.

Xapo’s core product is cold storage vault custody of bitcoin, with rumors that the company holds as much as $5.5 billion of assets under custody (AUC) at the current $BTC price near $8,000, reflecting ~700K bitcoin under custody. Xapo custodies 226,000 BTC that are part of Grayscale Bitcoin Trust.

The addition of several billion of AUC would be a huge shot in the arm for Coinbase. Under Xapo’s current business model, customers are not charged for storing their bitcoin. Rather, they generate revenue by enabling over-the-counter (OTC) trades for customers using the bitcoin under custody.

Xapo’s set of top-tier backers included top Silicon Valley VC firms such as Greylock Partners and Index Ventures as well as crypto investment firms Digital Currency Group, Winklevoss Capital and Blockchain Capital. Individuals including Max Levchin and David Marcus, currently head of Facebook’s cryptocurrency initiative, are also investors.

The acquisition will sit alongside other recent deals for Coinbase. The company has acquired 14 companies since its founding, with many in the past year including Earn, which it has since re-modeled to Coinbase Earn, and controversial blockchain analysis startup Neutrino. Coinbase faced severe criticism for that acquisition due to its leadership being nearly identical to that of Hacking Team, which had reportedly been involved in human rights abuses.