Payward, the parent company of crypto exchange Kraken, has agreed to buy the embedded wallet business of Magic Labs — and the most revealing number in the deal is the one nobody published. Payward paid $1.5 billion for futures platform NinjaTrader in 2025, up to $550 million for derivatives venue Bitnomial in April 2026 and $600 million for Hong Kong stablecoin firm Reap in May. For the infrastructure behind more than 60 million non-custodial wallets, it disclosed nothing at all, and structured the transaction as an asset purchase rather than a company acquisition. At Payward, licences and regulated venues carry a headline price. Key management software does not.
The second thing worth noticing is whose stack Payward is buying its way out of. Kraken was itself a named customer of Dynamic, the embedded wallet vendor Fireblocks acquired in October 2025 — meaning the exchange’s own onboarding layer sat inside a platform owned by a company selling the same custody and tokenisation services Payward Services sells. Owning Magic’s wallet unit does not merely add a product line. It removes a dependency on a competitor’s roadmap.
The deal was announced on July 27, 2026, with financial terms undisclosed and closing expected within weeks, subject to standard conditions. Magic Labs says its infrastructure has provisioned more than 60 million wallets for over 200,000 developers and processed more than $10 billion in stablecoin volume; its own site lists roughly 18,000 applications and names Polymarket, Naver, Mattel, Forbes, Immutable and WalletConnect among users. Those accounts move to Payward Services, the business-to-business arm that already sells crypto trading, custody, derivatives, tokenised assets and fiat on- and off-ramps to partners — the same unit that recently took xStocks into Hong Kong, the UK and Seoul.
“Embedded wallets are becoming foundational infrastructure for every onchain product,” said Mark Greenberg, Chief Commercial Officer at Payward. “Magic Labs’ technology lets us bring that layer in-house and offer partners a complete, integrated stack — exchange, custody, and now wallets — without stitching together multiple providers.”
Rivals have reached the same conclusion by different routes. Stripe bought Privy in June 2025 and now bundles wallets with Bridge stablecoin accounts, a combination visible in Ramp’s rollout of stablecoin accounts. Fireblocks folded Dynamic into a range that CEO Michael Shaulov framed as running “from custody to consumer”, and now pushes embedded wallets to the same institutional base that consumes its curated vault products. Coinbase built its developer wallet product in-house rather than buying one. That leaves Turnkey, Crossmint and Openfort as the notable independents in a category that has lost three of its largest names inside 10 months.
The seller’s framing matters too. “First, we’ve sold our wallet business to Payward, Inc., the parent company of Kraken. This is an asset sale,” wrote Sean Li, co-founder and chief executive of Newton Labs, the entity Magic Labs is rebranding to. Newton will focus on Newton Protocol, an authorisation layer that checks transactions against compliance and risk policy before settlement, which entered mainnet beta in June 2026. A founder who keeps the new protocol and sells the scaled distribution business is making a judgement about where the margin sits.
For Payward, the logic is a revenue mix problem. Non-trading services accounted for 53% of its $2.2 billion in adjusted 2025 revenue, and the trading half is the volatile half. First-quarter 2026 adjusted revenue rose just 3% to $507 million while adjusted EBITDA fell to $18 million, against $531 million for the whole of 2025. In May the company cut about 150 roles, some 5% of headcount, to trim its cost base before a listing. Kraken has been widening its non-exchange surface for months — it now sits behind a proprietary trading brand, as our Breakout Prop review documented. Wallets extend that logic into software subscriptions.
The valuation gap is the part the sector should sit with. Mastercard paid $1.8 billion to close on BVNK for stablecoin payment rails; wallet infrastructure serving 200,000 developers changed hands for a figure neither party thought worth naming. Payments volume is priced. Key custody plumbing is being absorbed as a feature.
Expect that to show up in Payward’s disclosure. The company filed confidentially for a US listing in November 2025, paused in March 2026, and was raising at a $20 billion valuation in May. An S-1 built on trading commissions is a cyclical document; one that can point to recurring infrastructure revenue from 200,000 developers is not. Watch for Payward Services to be broken out as a reported segment before the listing, and for the remaining independent wallet vendors to be acquired or repriced within the next two quarters.
Rick Steves
Rick Steves has seen business and economics through many lenses. He joined the financial services industry in 2009, and has been a financial journalist since 2011. He holds a degree in Business Administration and has experience producing real-time news, from both buy-side and sell-side, as well as for retail traders, brokers and service providers. Steves' work has appeared in a variety of online publications including FX Street, NewsBTC, FinanceFeeds, and The Industry Spread. Rick has great interest in the dynamics of the trading industry. The never-ending clash between technology, economics, regulation, and more importantly, the people.
