eToro acquires Zengo

eToro has purchased Zengo, a provider of self-custodial cryptocurrency wallets, for approximately $70 million, primarily in cash. This acquisition enables eToro to expand its services beyond its MiCA-regulated offerings in a strategic move to enhance its product suite. The deal, subject to customary closing conditions, brings Zengo's innovative wallet technology, which leverages multi-party computation cryptography, into eToro's fold. With more than 2 million users across 180 countries since its inception in 2018, Zengo adds significant heft to eToro's capabilities.

Zengo's wallet remains outside the regulatory framework governed by eToro's MiCA licence. Acquired under the auspices of the Cyprus Securities and Exchange Commission in early 2025, the licence regulates crypto-asset trading and custody across the European Economic Area. Unlike eToro's regulated exchange services, Zengo's non-custodial wallet interacts directly with Web3 services, allowing users to engage in decentralised applications, token swaps, and more, without eToro executing trades or holding assets directly. This separation aligns with eToro's strategic vision to provide users with on-chain activities without triggering additional regulatory requirements.

Strategically, the acquisition of Zengo positions eToro to cater to the growing market demand for decentralised finance (DeFi) solutions, a segment not comprehensively covered under current MiCA regulations. As the deadline for full MiCA compliance approaches in July 2026, eToro is well-placed compared to competitors who have yet to secure a licence. Zengo's architecture provides eToro with an avenue to offer DeFi services and self-custody solutions, an appealing alternative for users keen on autonomy and direct engagement with crypto protocols.

The broader market context is one of intense competition in the cryptocurrency services sector, with regulatory frameworks such as MiCA shaping platform strategies. While eToro's extensive user base of 40 million across 75 countries positions it strongly against competitors, the integration of Zengo's offerings could further enhance eToro's market share by appealing to users interested in diversified blockchain functionalities. Moreover, as more platforms seek regulatory compliance, acquisitions like these may become instrumental in capital allocation and strategic growth in the crypto sector.

Looking forward, eToro's acquisition of Zengo represents a step towards integrating decentralised and self-custodial wallet solutions without requiring alterations to existing regulatory standings. The next milestones for eToro involve successful integration of Zengo's technology and user base, without disrupting its current regulatory framework or operational stability. As regulatory landscapes continue to evolve, particularly with MiCA's impending framework, eToro's approach may serve as a model for balancing regulatory compliance with innovative service offerings in the cryptocurrency market.