Paxos, the regulated blockchain infrastructure firm behind stablecoins such as PayPal USD (PYUSD), has acquired Fordefi, a New York–based institutional crypto wallet startup, in a deal valued at more than $100 million.
The purchase marks a major expansion of Paxos’ custody and DeFi capabilities as institutional demand for secure decentralized finance access continues to rise.
A Strategic Push Into DeFi Custody
Paxos’ CEO and co-founder, Charles Cascarilla, emphasized that the move is driven by client demand for safer engagement with decentralized financial products.
“Together, Paxos and Fordefi provide customers with a world-class custody solution built upon advanced wallet technology and regulated, qualified custody. We’re excited to welcome Fordefi to our team as we enter this new phase of growth,” he said.
Fordefi currently supports nearly 300 institutional clients and operates multi-party computation (MPC) wallet systems—considered one of the industry’s highest standards for transaction security and private key protection.
According to Fordefi’s data, the company processes more than $120 billion in monthly transaction volume and maintains a team of 40–50 employees across New York and Tel Aviv.
For now, Fordefi will continue to operate independently, while its technology is gradually integrated into Paxos’ regulatory-grade custody architecture.
Building a Broader Financial Infrastructure
The Fordefi acquisition follows Paxos’ earlier 2025 purchase of Finnish fintech firm Membrane Finance, which expanded its regulatory footprint in Europe under MiCA requirements. Paxos has also rolled out multiple new stablecoins since 2023, including:
- PYUSD, issued for PayPal, which continues to gain traction as adoption grows.
- USDG, a dollar-backed token positioned as a competitor to USDT.
- USDH, designed for the Hyperliquid ecosystem and expected to launch in 2025.
With these developments, Paxos is evolving from being purely a token issuance and settlement service into a full-stack digital asset infrastructure provider—covering stablecoins, custody, regulatory compliance, and now institutional-grade DeFi wallet access.
Why Wallet Technology Matters
Fordefi’s MPC wallet infrastructure is at the center of the deal. MPC breaks a private key into multiple cryptographic fragments stored across separate parties or devices. This eliminates single points of failure—one of the leading causes of institutional loss in crypto breaches.
Paxos’ acquisition gives it native wallet technology for functions including:
- Institutional custody
- On-chain protocol interaction
- Transaction approval and governance controls
- Regulatory-compliant wallet management
Josh Schwartz, Fordefi’s CEO, said the partnership will help extend reach without compromising on security innovation. He noted that Fordefi’s core mission—bringing secure key management to institutions operating across both traditional and decentralized systems—remains unchanged.
A Signal of What’s Coming Next
This acquisition underscores a broader market trend: large financial entities are testing, entering, or expanding into regulated DeFi. While hacks, smart-contract exploits, and protocol failures still pose risks, institutional participation continues to increase—primarily through trusted, licensed entities like Paxos.
By bringing wallet infrastructure in-house, Paxos can now:
- Offer clients direct access to DeFi protocols
- Maintain regulatory oversight
- Reduce reliance on external wallet providers
- Build vertically integrated blockchain services
The deal also positions Paxos to become a foundational player in the transition from experimental DeFi to legally compliant, enterprise-grade decentralized finance.
