Stablecoin issuer Paxos acquires Fordefi, bolstering its crypto custody and wallet offering

Stablecoin issuer Paxos appears to be ramping up its M&A activity. On Tuesday, the firm said it has acquired digital asset storage platform Fordefi to bolster its crypto custody and wallet offerings. 

Fortune reported the acquisition was for more than $100 million and that the terms were undisclosed. The startup, founded in 2021, has raised at least $28 million, as of its last publicly announced funding round in 2024. 

The New York- and Tel Aviv-based Fordefi will continue operating independently while Paxos works to integrate its “wallet-as-a-service” tech and operations, according to the statement. 

Fordefi offers an institutional-grade multi-party computation (MPC) wallet solution that reportedly safeguards over $120 billion in monthly transaction volume. Paxos noted that via the integrated companies, “Clients will be able to build upon a single, trusted platform to issue stablecoins, tokenize assets, and build complex payment flows.”

“[Fordefi provides] robust transaction processing, a market-leading policy engine, support for more than 90 chains and integrated compliance tools,” Paxos wrote on X. “Together we will accelerate the future of secure institutional on-chain finance.”

Paxos is one of the dominant stablecoin providers — often the company tapped by brands like Binance and PayPal when they want to launch bespoke and branded stablecoins. PayPal’s PYUSD is now the sixth-largest dollar-pegged stable with a $3.7 billion market cap, according to The Block’s data.

In August, Paxos Trust Company agreed to pay a $26.5 million fine to settle a years-long legal dispute with the New York State Department of Financial Services over the 2018 launch of Binance USD, a.k.a. BUSD. 

Earlier this year, Paxos acquired Finland-based stablecoin issuer Membrane Finance, giving it access to the European market under the MiCA compliance regime.

Both deals come amid a flurry of crypto M&A activity, particularly in the stablecoin sector, as firms like Coinbase and Stripe look to gain a foothold in one of the most promising blockchain segments.