Online trading platform eToro has acquired self-custody cryptocurrency wallet provider Zengo for $70 million, according to sources familiar with the deal. The acquisition marks eToro’s latest move to expand its crypto infrastructure amid increasing regulatory scrutiny and user demand for greater control over digital assets.
Zengo, founded in 2018, offers a non-custodial wallet solution that allows users to retain full control of their private keys while providing simplified recovery options. The Israel-based company had raised $40 million in prior funding rounds before the acquisition. Analysts suggest the deal positions eToro to compete more directly with crypto-native platforms like MetaMask and Trust Wallet.
‘This acquisition signals traditional fintech firms recognizing the importance of self-custody in the crypto ecosystem,’ said a market analyst who requested anonymity due to client relationships. ‘After FTX’s collapse, users want alternatives to centralized custody.’
The transaction comes as regulators globally increase oversight of crypto custodians. The EU’s Markets in Crypto-Assets (MiCA) regulation, set to take full effect in 2025, imposes strict requirements on firms holding customer assets. Industry observers suggest eToro’s move may preempt compliance challenges while appealing to privacy-conscious users.
Looking ahead, the integration could face technical hurdles merging Zengo’s keyless wallet architecture with eToro’s existing infrastructure. Some analysts question whether mainstream trading platform users will adopt self-custody solutions en masse, given the steeper learning curve compared to custodial accounts.