S&P Global agrees to acquire smart contract security company OpenZeppelin, with transaction terms not disclosed. The company stated that this deal will extend its digital assets business beyond issuer credit and reserve assessments to include the security of code behind stablecoins, tokenized funds, and DeFi products.

OpenZeppelin continues to operate independently

The announcement states that OpenZeppelin will retain its original brand and continue to operate as an independent business unit, with co-founder and CEO Demian Brener continuing to be in charge. This transaction still needs to meet the regular delivery conditions.

S&P said that the open-source smart contract library of OpenZeppelin has been widely adopted by the stablecoin and tokenized fund markets. Contracts built on this code library have transferred a cumulative value of over $37 trillion. This refers to the historical cumulative transfer amount, not the asset size managed or held by OpenZeppelin.

Standard & Poor's adds the element of code risk

The core of this acquisition lies in addressing a portion of risks that are less covered by traditional rating systems: the smart contract code on which blockchain products rely for their operation. Even if a project has sufficient reserves and a stable credit status, issues may still arise due to contract vulnerabilities.

S&P said that as banks and asset management institutions advance with blockchain-based products, the market needs a more unified approach to technical risk assessment. The company hopes to use this opportunity to develop a new generation of blockchain security assessment, benchmarking, and data services to support the migration of capital markets onto the blockchain.

• The coverage includes stablecoins, tokenized funds, and DeFi products.
• The focus extends from main body risks to code and technical risks.
• It is not expected to have a significant impact on financial results after the transaction is completed.

Digital asset business continues to expand.

OpenZeppelin was established in 2015. In addition to providing an open-source contract library, it also offers on-chain security assessment and secure development services. Standard & Poor's states that the company has completed over 900 security projects, helping clients identify more than 10,000 vulnerabilities before their code goes live.

Over the past year or so, S&P has continued to expand its presence in the digital assets sector. Previously, the company had launched a stability assessment for stablecoins and issued credit ratings for the DeFi protocol and Sky. With this acquisition, its scope of coverage will extend further from "evaluating entities" to "evaluating code" as well.

Earlier this week, Standard & Poor's also led a strategic investment in the crypto data company Kaiko, raising the total amount of its Series B financing to $110 million. In early September, the S&P Dow Jones Index and Kaiko launched a joint digital asset index series; in March of this year, the two parties also completed the tokenization of the iBoxx U.S. Treasury bond index.