Paxos Acquires Fordefi to Secure Institutional DeFi Expansion

Paxos, a leading regulated blockchain infrastructure provider, has acquired Fordefi, an institutional-grade crypto custody and wallet technology firm, to strengthen its offerings in stablecoin issuance, asset tokenization, and on-chain operations. The deal, valued at over $100 million according to reports, combines Paxos' decade-long expertise in regulated custodial services with Fordefi's multi-party computation (MPC) wallet architecture and decentralized finance (DeFi) integrations as detailed in industry analysis. Fordefi, founded in 2021, has developed one of the first institutional MPC wallets tailored for DeFi, safeguarding over $120 billion in monthly transaction volume.

The acquisition expands Paxos' ability to offer a unified platform for institutions to issue stablecoins, tokenize assets, and manage on-chain transactions as highlighted by industry observers. Fordefi's technology, which includes a market-leading policy engine and support for over 90 blockchain networks, will be integrated into Paxos' infrastructure over time according to industry reports. Fordefi will continue operating independently in the short term, allowing existing customers to maintain their workflows while the integration progresses as stated by company leadership.

Paxos CEO Charles Cascarilla emphasized the strategic fit, stating that Fordefi's impressive stack complements Paxos' mission to provide secure, regulated custody solutions for complex digital asset needs. Josh Schwartz, Fordefi's CEO, added that the partnership would enable broader adoption of real-world digital asset use cases at scale according to company statements. The combined entity will serve major clients such as PayPal, Mastercard, and Interactive Brokers, with Paxos issuing stablecoins like PayPal USD (PYUSD) and Pax Dollar (USDP) as reported by industry analysts.

The move aligns with broader industry trends of integrating DeFi protocols into mainstream platforms. For instance, Coinbase and Crypto.com have recently incorporated DeFi lending tools like Morpho to offer users higher yields on stablecoins as reported in industry news. As of October 2025, DeFi protocols hold approximately $116 billion in total value locked according to market analysis, underscoring growing institutional demand for secure, scalable infrastructure.

Paxos' acquisition follows its earlier purchase of Finland-based Membrane Finance in 2025 to expand its European footprint under the MiCA regulatory framework as reported by financial outlets. The company, licensed in the U.S., Europe, and Singapore, faces heightened scrutiny in the crypto sector. Earlier this year, Paxos agreed to pay a $26.5 million fine to settle a dispute with New York's financial regulator over its role in Binance USD's 2018 launch according to regulatory filings.

The deal reflects a surge in M&A activity within the stablecoin sector, as firms like Stripe and Coinbase seek to consolidate their positions in the rapidly evolving blockchain ecosystem as reported by industry analysts. With Fordefi's MPC technology, Paxos aims to address the security and compliance challenges that institutions face when engaging with decentralized finance, positioning itself as a neutral, enterprise-grade platform for the on-chain economy.