Trading platform eToro said Thursday it led a $12.5 million strategic round in Extended, an onchain exchange for perpetual futures.
Etoro said the investment is tied to a partnership with Zengo, the self-custody wallet eToro acquired earlier this year. At the time of the acquisition, Bloomberg reported Zengo was valued at around $70 million.
“The partnership will focus on expanding access to global financial markets through next-generation on-chain infrastructure,” eToro said in a post on X. “Together, we will explore opportunities to bridge traditional financial assets and decentralized trading environments.”
Jump Crypto also participated in the round, according to Thursday’s post.
Extended, founded by former Revolut employees, opened trading in late 2024, according to a statement at the time. The platform is built on StarkWare’s onchain scaling engine, StarkEx.
Zengo, which was founded in 2018, built its wallet around multi-party computation cryptography, removing the need for seed phrases while offering token swaps, staking, and access to decentralized applications. Etoro has been integrating the non-custodial wallet’s technology into its brokerage platform, broadening its digital asset stack and connecting it with onchain infrastructure.
In May, eToro reported that its profit from crypto was $13 million in Q1 2026, or about 5% of its total net trading profit of $258 million, down significantly from the $46 million generated during the same period in 2025.
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Executive Summary
eToro has quietly pivoted from crypto broker to infrastructure builder—leading a $12.5M strategic round in Extended, its newly minted onchain perpetuals exchange. The real play: embedding Zengo’s seedless MPC wallet as the control layer for retail participation in DeFi-derived trading, sidestepping regulatory friction while capturing yield-focused users.
The Core Friction
This isn’t “fintech partnering with DeFi”—it’s DeFi rebranded for compliance. eToro, whose crypto profit slumped 72% YoY in Q1 2026 ($13M vs $46M), needs new revenue vectors beyond spot commissions. By integrating StarkEx-powered perpetuals through Zengo, eToro gains three strategic exits: (1) a defensible onchain moat ahead of SEC overreach, (2) a path to share in trading fees and liquidity provider yields, and (3) a testbed for bridging CEX-like UX with onchain settlement—no seed phrases, no cold wallets, just frictionless perps.
The Jump Crypto participation signals institutional credibility, but the real signal is the timing: this round locks in infrastructure before the SEC’s likely push against yield-generating hybrid products in 2027.
Market Impact & Chain Reaction
- Short-term: Extended gains instant visibility among eToro’s 30M+ users; Zengo’s swap & dApp access may see 3x-5x usage spikes as users discover DeFi without leaving the eToro app. BTC/ETH perpetual volumes could jump 20–30% on launch day.
- Mid-term: Competitors will scramble—Phemex and Bybit may accelerate L2 rollouts, while GMX and Verse could see capital rerouted to “regulated-perps” with familiar interfaces. More critically, this may accelerate FTX-type restitution funds (e.g., BlockFi, Celsius alumni) to partner with MPC-wallet startups, not just CEXs.
RichSilo Verdict
Smart money should watch Extended’s leverage tiers and funding rate architecture—not the round size. If they adopt GMX-style capital efficiency with tiered margin requirements tied to Zengo’s risk scoring, this becomes the de facto onramp for institutional DeFi. If not, it’s another fintech vanity project. The 2027 regulatory season—especially around KYC on L2s—will determine whether this model scales or splinters.
