eToro Grabs Zengo in Push for Self-Custody Wallets and Prediction Markets

eToro bought Zengo. The Israeli wallet maker’s self-custody tech now belongs to the trading platform, which announced the deal Wednesday. Financial terms didn’t get disclosed, and the transaction still needs to clear standard closing conditions.

The move gives eToro a working non-custodial product right away. No need to build from scratch. The company already rolled out its own non-custodial wallet earlier this year, hooking it up with Polymarket for prediction markets. CEO Yoni Assia said he’s been talking with Kalshi too, another prediction market operator. But Zengo brings something different—proven technology that’s already in users’ hands, plus fiat on-ramps, token swaps, and staking services all bundled together.

What eToro Gets From the Deal

Zengo’s wallet uses multi-party computation cryptography. That’s a keyless system, basically. No private keys to lose or get stolen. The tech splits cryptographic operations across multiple parties, so there’s no single point of failure. For a retail-focused platform like eToro, that’s pretty valuable. Users can’t lock themselves out by losing a seed phrase.

The acquisition fits into eToro’s broader digital asset strategy, which now explicitly covers tokenized assets and prediction markets. By February, the broker reported some big numbers: 70.2 million trades year-on-year, $17.6 billion in assets under administration, and 3.9 million funded accounts. Average investment per trade dropped to $180, suggesting retail traders are making smaller, more frequent bets.

Assia said the company sees finance moving toward digital and decentralized models. “We believe the future of finance will be increasingly digital, decentralized, and user-controlled,” he noted. Zengo’s wallet tech plays into that vision, giving users control over their assets without needing to trust a centralized custodian.

Prediction Markets Heat Up

Prediction markets went from niche to mainstream fast. Robinhood’s prediction markets unit crossed 9 billion contracts recently. That’s real volume. Kalshi grabbed a chunk of the regulated prediction market too. The space is growing, and eToro wants in.

The company’s earlier integration with Polymarket was a first step. Now Zengo adds another layer. The wallet supports prediction market trading alongside regular crypto functions, so users can bet on outcomes and manage their digital assets in one place. No need to juggle multiple apps.

Ouriel Ohayon runs Zengo as CEO. He said the acquisition speeds up their mission of making self-custody simple and secure. “This accelerates our mission,” he noted, adding that partnering with eToro helps them reach a global audience faster. Zengo had been working on user-friendly security solutions for a while, trying to crack the problem of making crypto wallets accessible to people who aren’t tech experts.

eToro’s expansion hasn’t been limited to acquisitions. The platform recently extended services to New York, bringing its U.S. presence to 48 states. The company’s been pushing hard into fintech, making strategic investments and partnerships to strengthen its position. Zengo fits that pattern—grab proven technology, integrate it, and offer users more options.

There’s no immediate change for eToro users. The integration will happen over time. The company hasn’t specified exactly when users can expect access to Zengo’s features, but both sides expressed confidence about the collaboration’s potential benefits. Analysts have drawn connections to eToro Opens App Store for Third-Party amid evolving conditions.

Zengo’s approach to wallets stands out in a crowded market. The multi-party computation system eliminates traditional private keys, which have been a pain point for crypto adoption. People lose keys, forget seed phrases, or get phished. Zengo’s system removes those risks by distributing cryptographic operations. It’s not foolproof, but it’s easier for regular users to handle.

eToro faces competition from Robinhood and Kalshi in prediction markets. Robinhood’s already got serious volume. Kalshi carved out space in the regulated market. But eToro’s got scale—millions of funded accounts and billions in assets under administration. Adding Zengo’s tech could give it an edge, especially if the integration goes smoothly.

The broader trend here is traditional finance companies adopting decentralized tech. eToro’s not the first, won’t be the last. Banks and brokers are figuring out how to offer crypto services without giving up control entirely. Non-custodial wallets let them do that—users control their assets, but the platform still provides the interface and services.

Assia’s vision of user-controlled finance aligns with Zengo’s security-first approach. Both companies seem to think retail users want more control over their money, as long as it’s not too complicated. The challenge is making decentralized finance accessible without sacrificing security. Zengo’s keyless system tries to thread that needle.

The timeline for full integration remains unclear. eToro hasn’t announced specific dates for new features or product launches. Both companies said they’ll provide updates as the integration progresses. Users can probably expect enhanced platform capabilities eventually, particularly around decentralized finance and secure asset management.

Zengo’s fiat on- and off-ramps are a big part of the package. Moving money between traditional banking and crypto has been a friction point. Zengo built infrastructure to smooth that out, and eToro gets it all. Token swaps and staking services add more functionality, turning the wallet into a comprehensive tool for retail crypto users.

The acquisition still needs to close, pending standard conditions. No major obstacles have been mentioned, so it’ll probably go through. Once it does, eToro will own Zengo’s technology, team, and user base. How quickly they integrate everything depends on technical challenges and regulatory approvals, which can take time. Industry observers have noted parallels with UK Liberal Democrats Push FCA to in recent weeks.

eToro’s been aggressive about expansion lately. The New York launch was a big deal, opening up a huge market. The Zengo acquisition fits the same pattern—move fast, grab market share, and build out capabilities before competitors do. With prediction markets heating up and crypto adoption still growing, timing matters.

Ohayon said there’s no plan to shut down Zengo’s existing operations. The wallet will keep running, and users won’t see immediate changes. Over time, though, eToro will likely merge the products or at least integrate them closely. That’s how these acquisitions usually play out.

The prediction markets angle is interesting. These markets let people bet on real-world outcomes—elections, sports, economic indicators, whatever. They’ve been around for years but recently gained traction with retail traders. Polymarket got huge during the 2024 U.S. elections. Kalshi built a regulated platform. Robinhood jumped in with massive volume. Now eToro’s pushing harder into the space with Zengo’s tech backing it up.