ConsenSys acquires JPMorgan's blockchain platform Quorum

NEW YORK (Reuters) - Brooklyn-based technology startup ConsenSys has acquired JPMorgan Chase & Co's JPM.N marquee blockchain platform Quorum, the companies said on Tuesday.

As part of the deal JPMorgan also made a strategic investment in ConsenSys, but the companies declined to disclose financial terms of the relationship, which will remain ongoing.

“We have acquired the Quorum IP, JPMorgan has made a strategic investment, and there is a commercial arrangement to continue to support JPMorgan in their projects,” ConsenSys Chief Executive and founder Joseph Lubin said in an interview, using an acronym for “intellectual property.”

The Quorum team will remain at JPMorgan and help with the transition over the next year and will later work on other blockchain projects, Umar Farooq, global head of blockchain at JPMorgan, said in an interview.

“We believe a platform like Quorum could thrive better in the hands of a software and services oriented organization,” Farooq said.

Reuters had reported in February that the companies were discussing a deal.

Blockchain emerged over a decade ago as the software powering cryptocurrency transactions. Since then, banks and other large corporations have been investing millions of dollars to develop and test a range of business applications using the nascent technology. Efforts have had mixed results, with few projects achieving significant impact.

JPMorgan built the Quorum blockchain internally using the ethereum network, the software that underpins ether, one of the most well known cryptocurrencies.

Quorum, which will remain open-source, is being used by the bank to run the Interbank Information Network, a payments network that involves more than 300 banks. The network and other bank projects running on Quorum will continue to operate using the platform, JPMorgan said.

ConsenSys, a prominent blockchain startup that grew rapidly during the 2017 crypto bubble, underwent a restructuring earlier this year to separate its software development business from its venture activities.

Reporting by Anna Irrera; editing by Jonathan Oatis