Paxos, a prominent player in the blockchain infrastructure space, has made a significant acquisition by purchasing Fordefi, a provider specializing in digital asset security and custody solutions. This strategic move, reportedly valued at over $100 million, aims to bolster Paxos” offerings for institutional clients.
Based in New York and regulated by state authorities, Paxos is known for its focus on tokenization and blockchain infrastructure. The acquisition of Fordefi, which is recognized for its institutional-grade security and innovative decentralized finance (DeFi) wallet solutions, represents a fusion of expertise between the two firms. Fordefi”s technology, particularly its multi-party computation (MPC) wallet infrastructure, is expected to enhance the security of digital asset management.
MPC is a sophisticated cryptographic technique that allows multiple parties to hold fragments of a private key, preventing a single point of failure. This method enhances security by requiring collaboration among parties to execute transactions without ever reconstructing the full private key.
While neither Paxos nor Fordefi have disclosed specific details about the nature of the acquisition, the move is poised to facilitate the development of a comprehensive platform for institutional clients. This platform will enable clients to issue stablecoins, tokenize assets, and create complex payment flows, all while adhering to stringent security and regulatory standards.
Charles Cascarilla, CEO and co-founder of Paxos, emphasized that the firm serves as a neutral, enterprise-grade platform designed to integrate traditional enterprises into the digital asset economy. He noted that Fordefi”s user-friendly Application Programming Interface (API) and accessibility in the Web3 environment align perfectly with Paxos” mission.
Cascarilla expressed enthusiasm about the collaboration, stating, “Together, Paxos and Fordefi provide customers with a world-class custody solution built upon advanced wallet technology and regulated, qualified custody.” This acquisition is particularly timely as Paxos” solutions are already utilized by major financial institutions such as PayPal, Mastercard, and Interactive Brokers.
Fordefi”s CEO, Josh Schwartz, highlighted that approximately 300 institutions are currently utilizing their wallet platform. The integration with Paxos is expected to expand both companies” global reach while enhancing their combined custody and stablecoin frameworks.
As the digital asset landscape evolves, this acquisition underscores the importance of robust security and compliance in attracting institutional clients into the cryptocurrency space.
