Payward, the parent company of crypto exchange Kraken, signed a definitive agreement on July 27 to acquire Magic Labs’ wallet-as-a-service business line. The value of the acquisition was not disclosed, and the transaction is expected to close within the coming weeks. Through this move, Payward officially takes control of the embedded non-custodial wallet infrastructure that powers more than 60 million crypto wallets and has processed over $10 billion in stablecoin volume.
Focus on the Wallet Engine, Not the House
The deal is structured as a specific asset purchase. Payward is acquiring only the wallet product and its technology, rather than buying the entire Magic Labs business entity. Once the transaction closes, the original Magic Labs entity will rebrand to Newton Labs and continue operating independently.
Newton Labs’ focus is now shifting entirely to Newton Protocol, an onchain transaction policy and authorization system that entered its mainnet beta phase on June 23. The first product launched through this new system is VaultKit, a tool specifically designed to assist DeFi vault operators.
Meanwhile, Payward will integrate the acquired technology into Payward Services. This unit is the flagship infrastructure platform offered to banking clients, fintech firms, other exchanges, and various onchain applications. For the more than 200,000 developers who have used Magic’s services since 2018, the transition is designed to be seamless. Starting August 1, all existing wallet customers will transition directly under the Payward umbrella without requiring any additional steps.
Building a Complete Infrastructure Ecosystem
Payward’s move to take over technology that previously secured a $52 million strategic investment from PayPal Ventures in May 2023 aligns with its recent acquisition spree. Magic Labs itself had raised over $80 million in total capital before carving out its wallet division in this transaction.
Prior to the Magic asset deal, Payward spent $550 million to acquire Bitnomial, $600 million for Reap, and acquired NinjaTrader for $1.5 billion, alongside the purchase of Backed Finance. These acquisitions are reshaping Kraken’s business blueprint. From an entity primarily known as a venue for retail traders to execute orders, Payward is now uniting trading desks, wallet infrastructure providers, payment networks, asset custody, derivatives services, and tokenized asset issuance.
Payward’s aggressive expansion is forcing other industry players to rethink the competitive arena. The battle among exchanges is shifting from merely competing over trading volume to vying for dominance over crypto’s backend foundation. Reported by crypto.news.
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Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
