eToro has agreed to acquire crypto wallet provider Zengo, adding self-custodial capabilities to its platform as part of a broader push into on-chain financial services. The transaction combines eToro's multi-asset distribution with Zengo's wallet infrastructure, reflecting a shift toward user-controlled digital asset models. Zengo specializes in self-custodial wallets built on multi-party computation technology, eliminating the need for traditional private key storage while improving security and accessibility for non-technical users.
Zengo's Keyless Security and Built-in Features
Zengo's wallet architecture distributes cryptographic operations across multiple components, reducing risks from key loss or theft. The wallet includes token swaps, staking, and fiat on/off ramps, positioning it as a full-service hub for digital asset management. Co-founder and CEO Ouriel Ohayon said the company has focused on making self-custody accessible to everyday users, and joining eToro provides an opportunity to scale this approach within a larger global platform.
Integration Powers On-Chain Services
The combination of eToro's brokerage platform and Zengo's wallet technology is expected to support tokenized assets, decentralized trading mechanisms like prediction markets and perpetual contracts, and other on-chain applications. Users will move more easily between custodial and non-custodial environments—trading on a centralized exchange then transferring assets to self-custody for use in dApps. Over time, eToro plans to embed Zengo's user experience directly into its interface, eliminating the need for separate applications. This approach aims to reduce friction for users entering decentralized finance, where complexity has historically been a barrier.
Hybrid Custody Models Gain Traction
The acquisition reflects a broader trend in digital asset markets toward hybrid custody models that combine centralized efficiency with self-custody autonomy. Historically, users had to choose between exchanges and independent wallets; integration reduces this separation. Growth in DeFi, which often requires self-custodial wallets, drives this convergence. Platforms lacking such capabilities risk losing users to flexible competitors. However, self-custody also introduces more responsibility for users, making usability and security critical factors in adoption.
What Users Can Expect
In the short term, eToro users will see no immediate changes. Over time, the integration will unlock access to decentralized trading and yield-generating services, alongside greater flexibility in managing assets—users can hold funds on-platform or move them into self-custody for external use. Yet self-custody requires understanding associated risks; while MPC reduces some threats, managing assets outside centralized custody demands caution. eToro Co-founder and CEO Yoni Assia stated that self-custody is an important component of the evolving financial system, where users seek greater control over digital assets. The acquisition supports the firm's strategy to connect traditional finance with on-chain infrastructure.