PayPal steps up crypto efforts with acquisition of blockchain security startup Curv
PayPal said Monday that it's acquiring Curv, a startup based in Tel Aviv that provides security infrastructure for digital assets and blockchains. The deal is meant to support PayPal's recent foray into cryptocurrency, including the launch of the company's new business unit focused on blockchain, crypto and digital currencies.
Featured
On its website, Curv explains that its "secret sauce" is the use of multi-party computation (MPC) protocols that eliminate the use of private keys for crypto storage. According to Curv, private keys are the single point of failure in public key cryptography.
The company said its MPC protocols leverage independently generated shares of cryptographic material, mathematics and cloud computing to prevent unauthorized access to digital wallets and provide a distributed way to sign blockchain transactions and manage digital assets.
Curv and its team of technologists will join PayPal's newly formed crypto group and its technology will form the security layer for PayPal's own digital assets.
"The acquisition of Curv is part of our effort to invest in the talent and technology to realize our vision for a more inclusive financial system," said Jose Fernandez da Ponte, VP and GM of blockchain, crypto and digital currencies for PayPal. "During our conversations with Curv's team, we've been impressed by their technical talent, entrepreneurial spirit, and the thinking behind the technology they've built in the last few years. We're excited to welcome the Curv team to PayPal."
In October, PayPal confirmed its entry into the crypto market after receiving a conditional license from the New York State Department of Financial Services (NYDFS), which allows US users of its Venmo service to buy, hold, and sell cryptocurrencies.
When discussing its fourth quarter financial results last month, PayPal CEO Dan Schulman said the company has designed an extensive product roadmap around crypto, blockchain and digital currencies.
"We are significantly investing in our new crypto, blockchain and digital currencies business unit," Schulman said on a call with analysts. "We also saw an exceptional response from our crypto launch, even with high initial expectations the volume of crypto traded on our platform greatly exceeded our projections. We are excited to build upon this early success by allowing customers to use their crypto balance as a funding source whenever they shop at our 29 million merchants. We anticipate the rollout of that capability to begin late this quarter, and we hope to launch our first international market in the next several months. These initial steps are just the beginning of an extensive road map around crypto, blockchain and digital currencies."
Financial terms of the Curv deal were not disclosed by PayPal, but some media reports estimate the cost to be around $200 million.