Paxos has announced the acquisition of Fordefi, a cryptocurrency wallet startup, in a deal valued at over $100 million. This strategic move aims to bolster Paxos” custody services, responding to the increasing demand from institutional clients for secure on-chain asset management and stablecoin payment solutions.
The integration of Fordefi”s multi-party computation (MPC) wallet architecture into Paxos” existing infrastructure is set to enhance the company”s offerings in the digital asset space. The MPC technology is designed to improve security by distributing transaction approvals across multiple parties, thereby minimizing the risks associated with private key compromises.
Paxos, already recognized for its role as the provider behind PayPal“s stablecoin, is focused on meeting the evolving needs of financial institutions that are increasingly adopting digital assets. According to Paxos CEO Charles Cascarilla, “Enterprises want a regulated partner they can trust with complex wallet and custody needs.” This acquisition supports the firm”s ongoing strategy to provide robust and flexible infrastructure for clients developing on-chain applications.
Founded in 2021, Fordefi specializes in wallet solutions for institutional clients and has built a strong clientele of nearly 300 institutions. With this acquisition, Paxos not only expands its wallet capabilities but also integrates important decentralized finance (DeFi) functionalities that align with its broader custody objectives.
Prior to this acquisition, Paxos had invested in Fordefi, participating in a $10 million funding round last year. The startup will continue to operate independently during the integration process, allowing for a seamless transition as Paxos incorporates Fordefi”s advanced technology into its platform.
The acquisition of Fordefi is emblematic of a larger trend within the cryptocurrency industry, where wallet providers are increasingly attractive targets for acquisition by major financial firms. This highlights the escalating significance of custody services in the digital asset ecosystem, as institutions seek secure and regulated solutions for managing their cryptocurrency holdings.
As Paxos moves forward with the integration of Fordefi”s wallet infrastructure, the emphasis remains on equipping institutions with the necessary tools to manage digital assets securely. With this acquisition, Paxos is poised to strengthen its position within the rapidly growing institutional cryptocurrency market.
