Crypto giant Tether invests in Israeli wallet Zengo
The Israeli startup, founded in 2019, offers an alternative to traditional wallets that rely on seed phrases—often a target for hackers. The company claims to have served over 1.5 million users without a single wallet being compromised.
Tether, the company behind the world’s largest stablecoin, has made a strategic investment in Zengo, an Israeli self-custodial crypto wallet. The deal marks another step in Tether’s efforts to promote self-custody solutions, a topic of increasing importance amid growing regulatory scrutiny of stablecoins.
Zengo, founded in 2019, has built a reputation for its security-focused approach to cryptocurrency storage, offering an alternative to traditional wallets that rely on seed phrases—often a target for hackers. The company claims to have served over 1.5 million users without a single wallet being compromised. The investment from Tether will enable Zengo to expand its blockchain-agnostic capabilities and integrate broader support for Tether’s stablecoins, making it easier for users to store, transfer, and transact with Tether’s tokens across different blockchain ecosystems.
Paolo Ardoino, CEO of Tether, framed the investment as part of a broader push to enhance the safety and reliability of digital asset management. “Tether is committed to delivering reliable and secure tools that empower users to take control of their digital assets. Our investment in Zengo reflects that commitment,” he said.
For Zengo, the deal provides an opportunity to scale its offerings, including Zengo Pro, a premium product with theft protection, legacy transfer features, and enhanced customer support. “Stablecoins are the cornerstone of an inclusive financial future,” said Ouriel Ohayon, Zengo’s co-founder and CEO. “We are proud to partner with Tether to make self-custody simple, secure, and accessible.”
Tether’s move comes as the stablecoin market continues to expand, with its USDT token accounting for approximately two-thirds of the $212 billion stablecoin market, according to CoinGecko. Stablecoins have grown by roughly 45% over the past year, driven by demand for digital dollars in crypto trading and cross-border transactions. However, their increasing role in global finance has drawn heightened regulatory attention. Policymakers have raised concerns about whether stablecoin issuers hold sufficient reserves and how these assets could impact the broader financial system.
Tether, which reported $13 billion in profits in 2024, has long faced scrutiny over the transparency of its reserves. The company claims the majority of its holdings are with Wall Street brokerage Cantor Fitzgerald, whose CEO, Howard Lutnick, has been nominated to lead the U.S. Commerce Department under President-elect Donald Trump.
The investment in Zengo signals Tether’s broader ambition to solidify its role in the crypto economy beyond issuing stablecoins, focusing on security infrastructure amid growing calls for oversight in the sector.
