Israeli website Calcalist has reported that Paypal is in talks to acquire digital asset custody firm Curv for $200 – $300 million. Late last year PayPal launched cryptocurrency trading in the U.S. with the service powered by U.S.-based Paxos. It intends to roll out the ability for merchants to accept cryptocurrencies this month.
Shortly after the launch, rumors emerged that PayPal was on the hunt for acquisitions. At the time, BitGo, a digital asset custodian and prime broker were mentioned. But with more than $16 billion in assets under management, it might be more pricey than Curv.
Israeli startup Curv has raised almost $30 million to date, including a $23 million Series A in the middle of last year, which included Commerzbank Ventures as an investor as well as Coinbase Ventures, Digital Currency Group, Team8 and Digital Garage Lab Fund.
Curv’s solution uses multiparty computation for its custody solution. MPC uses ‘shares’ of a cryptographic key, distributed confidentially among multiple users, including Curv itself. Only when the correct set of shares are used together can a transaction be performed.
It’s no surprise that the top digital asset custody firms are acquisition targets. The custody opportunity is far larger than cryptocurrency and includes the potential for central bank digital currencies, tokenized securities and other digital assets.
The largest technology custody firm funding-wise is U.S.-based Anchorage which recently raised an $80 million Series C bringing total funds raised to $137 million. But it has big plans beyond custody. Another major player is Switzerland’s METACO backed by Standard Chartered, Swisscom and others.