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eToro agreed on Wednesday to acquire Zengo, a self-custodial crypto wallet built on multi-party computation cryptography, for approximately $70 million in mostly cash. The deal is subject to closing conditions. Zengo has more than 2 million users across 180 countries and has operated since 2018 without a single wallet hack. eToro has 40 million registered users across 75 countries and listed on Nasdaq in May 2025.
The regulatory architecture
eToro (Europe) Ltd holds a MiCA licence granted by the Cyprus Securities and Exchange Commission in early 2025, passported across all 27 EU member states and the wider European Economic Area. That licence covers regulated crypto-asset trading and custody. In Germany, eToro's crypto custody runs through Tangany GmbH, an authorised partner. The regulated entity is tightly defined, tightly supervised, and tightly constrained.
Zengo's wallet sits entirely outside that structure. eToro's own announcement states this directly: the non-custodial wallet is a separate product from eToro's regulated exchange services. Users who access Web3 services through Zengo — decentralised applications, token swaps, staking, prediction markets, perpetuals — do so by interacting directly with third-party protocols. eToro does not execute those trades. eToro does not custody those assets. The MiCA perimeter does not apply.
This is not an accident of deal structure. It is the only viable architecture for a MiCA-licenced platform that wants on-chain exposure for its users without importing regulatory liability it cannot currently price or manage. MiCA does not comprehensively regulate self-custody or DeFi interactions in the way it regulates centralised crypto-asset service providers.
The July 1, 2026 deadline for full MiCA compliance across the EU is now fewer than three months away. Every platform without a licence is running out of time. eToro already has its licence. What it was missing was the infrastructure to serve users who want to move beyond what that licence permits.
Zengo provides exactly that. The acquisition gives eToro a path to on-chain exposure that requires no regulatory notification, no additional licence, and no modification to its existing MiCA framework. Users opt into a separate product with a separate legal structure. The risks and the responsibility travel with them.
What Zengo is
Zengo was founded in 2018 around a single design thesis: eliminate the seed phrase. Traditional crypto wallets require users to store a sequence of words that functions as a master key to their funds. Losing that sequence means losing the assets permanently.
Zengo replaced it with multi-party computation cryptography, generating two independent mathematical secret shares — one on the user's device, one on Zengo's servers — that collaborate to sign transactions without the full private key ever being assembled or exposed to either party. The company has never suffered a wallet hack.
Beyond the security architecture, Zengo offers token swaps, staking, fiat on-ramps and off-ramps, and access to decentralised applications. Zengo Pro includes a Bitcoin Vault and a wallet inheritance feature. Zengo Business targets small and medium enterprises and institutional teams. The product is already comprehensive. What it lacks is distribution at scale. eToro provides 40 million registered users, most of whom currently access crypto exclusively through eToro's regulated exchange.
What eToro gets
eToro CEO Yoni Assia has stated that the future of finance will be digital, decentralised, and user-controlled. The Zengo acquisition is the operational expression of that thesis. eToro's platform has significant retail scale. Its Q1 2026 results showed commodity trading accounting for 60% of trading commissions by asset class, with commodity volume roughly four times higher year-over-year, driven by the macro dynamics of the Strait of Hormuz disruption. That growth happened entirely inside the regulated exchange. Zengo is how eToro participates in the part of crypto that a regulated exchange cannot reach.
eToro has also been building adjacent infrastructure. On April 14, the company launched the eToro App Store, an AI-enabled ecosystem for trading and investing. The timing of the Zengo acquisition, one day later, suggests a coordinated move toward a more comprehensive financial platform architecture. Zengo integrates with the on-chain economy. The App Store integrates with the AI economy. Both sit alongside the regulated exchange rather than inside it.
The broader context
The European fintech sector has been reorganising itself around the licence question for two years. Companies with full banking licences or MiCA authorisations have capital and operational advantages that EMI-licenced or unlicensed competitors cannot match.
The July 1, 2026 deadline is accelerating that consolidation. Firms without MiCA authorisation have a shrinking window to either obtain one or exit EU markets.
eToro has the licence. The Zengo acquisition extends its reach into territory the licence does not cover — not by circumventing regulation, but by operating in the space that regulation has not yet reached. That is a structurally different strategy from what either a pure DeFi protocol or a pure MiCA-licenced exchange can execute. It requires being both at once.
The deal closes subject to customary conditions. Zengo will continue operating independently for existing users in the near term. The integration is described as gradual. The architecture is the point. eToro is not building a crypto wallet. It is building a regulated exchange with an unregulated on-chain layer attached. Those are not the same product, and they are not governed by the same rules. Keeping them separate is not a limitation. Under current European law, it is the design.
Editor's note: We are committed to accuracy. If you spot an error, a missing detail, or have additional information about any of the companies or filings mentioned in this article, please email us at [email protected]. We will review and update promptly.
