A recent shareholder letter from Payward reveals tangible pressure on the digital asset exchange business. The parent company of crypto exchange Kraken posted adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $60 million in the third quarter of 2026. The figure, reviewed by Bloomberg News, plunged 67% compared to roughly $182 million in the same period last year.
The profit contraction came alongside cooling market activity, prompting the company to accelerate diversification into alternative financial products beyond conventional trading fees.
The Burden of Shrinking Volume
Total platform margin, Payward’s revenue proxy metric, fell 12% year-over-year in the third quarter to $487 million. The pressure centered on subdued market activity, with exchange trading volume dropping 30% to $353 billion.
Despite the year-over-year decline, quarterly performance began showing signs of recovery. Compared to the second quarter of 2026, adjusted EBITDA surged 163% and total platform margin grew 12%. Meanwhile, Kraken’s user base continued to expand, with funded accounts rising 37% year-over-year to 7.1 million.
Reducing Reliance on Trading Fees
To curb reliance on standard crypto transaction commissions, Kraken has aggressively expanded into tokenized equities through its xStocks ecosystem. The vertical now hosts over 1,500 assets, including 200 European equities such as constituents of the FTSE 100 and DAX 40. Assets under management for xStocks have reached $1.1 billion, with cumulative transaction volume exceeding $45 billion.
That diversification is now pushing into two new verticals. In its letter to investors, Payward announced strategic plans to enter the prediction market space and launch its own native crypto token. Management has yet to provide an official launch timeline or tokenomics details for the upcoming digital asset.
European Banking Footprint and IPO Plans
Kraken’s move to expand its financial infrastructure also extends into conventional banking. Payward has agreed to acquire Saldo Finance Oy, the Lithuania-based parent company of Saldo Bank. Pending regulatory clearance, the transaction is targeted for completion in 2027 to unlock savings, lending, and payment card services across Europe.
In the Middle East, Payward secured a full license from Dubai’s Virtual Assets Regulatory Authority (VARA) in October to offer crypto trading alongside local fiat deposits and withdrawals in the United Arab Emirates. Kraken is also readying on-chain perpetual futures for US clients. Meanwhile, the company’s planned initial public offering (IPO) is not expected until the second half of next year at the earliest.
When crypto trading volume can plunge by a third within a year, exchanges can no longer rely solely on token-swapping commissions. For users, Kraken is gradually moving beyond a standard crypto exchange toward a diversified financial services conglomerate.
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.
