Paxos Acquires Fordefi
Paxos, a company specializing in blockchain infrastructure, has made a strategic move by purchasing Fordefi, a startup based in New York that focuses on institutional crypto wallet and custody technology. This acquisition is expected to enhance Paxos’s regulated custody framework by integrating it with Fordefi’s sophisticated multi-party computation (MPC) wallet technology, along with its ties to decentralized finance (DeFi).
Enhanced Solutions for Institutions
The combined solution aims to provide institutions with a unified platform for stablecoin issuance, asset tokenization, and the management of on-chain transactions.
Although the specifics of the financial transaction were not disclosed, a spokesperson for Paxos shared with Fortune that the acquisition exceeded the $100 million mark.
Founded in 2021, Fordefi is recognized for creating one of the pioneering institutional MPC wallets tailored for DeFi, which includes governance functionalities that empower companies to approve and execute on-chain transactions.
Future Integration Plans
Initially, Fordefi will maintain its independent operations, but Paxos intends to incorporate its innovations into its broader blockchain framework over time. Paxos itself is a regulated entity that offers custodial, tokenization, and stablecoin services to prominent enterprises such as PayPal, Mastercard, and Interactive Brokers.
The company operates under licenses in regions including the United States, Europe, and Singapore, and has issued multiple stablecoins, including the Pax Dollar (USDP) and Pax Gold (PAXG).
Industry Context
This acquisition comes at a time when firms across the cryptocurrency sector are increasingly integrating DeFi protocols into their offerings, enabling users direct involvement with on-chain financial services. For example, in June, Kraken collaborated with Solana’s DeFi Development Corp to transition Kraken shares onto the blockchain, while Coinbase, in September, introduced the Morpho lending protocol within its platform, facilitating USDC lending for users.
As of October, DeFi protocols manage around $116 billion in total value locked, according to data from DefiLlama. This statistic reflects an industry growth trend that continues to evolve despite significant market fluctuations, such as those witnessed during a recent large-scale liquidation event in early October.
