Kraken parent Payward agrees to buy wallet infrastructure used by 60 million wallets
Payward, the parent company of Kraken, signed a definitive agreement on July 27 to buy Magic Labs’ wallet-as-a-service business. The asset purchase brings infrastructure that has powered more than 60 million wallets and processed over $10 billion in stablecoin volume into Payward Services.
- Asset purchase: Payward is buying Magic’s wallet business, not Magic Labs as a whole.
- Scale: More than 60 million wallets and over 200, 000 developers.
- Split: Magic Labs has rebranded as Newton Labs and will keep operating independently.
- Strategy: Payward keeps building a broader crypto infrastructure stack.
This is another clear sign that Payward wants to be more than an exchange operator. The company has been steadily adding pieces of a larger infrastructure stack, and wallets are a useful piece if you want to serve fintechs, banks, exchanges, and onchain applications without forcing them to build everything from scratch.
The financial terms were not disclosed, and the deal is expected to close within several weeks, subject to customary closing conditions. Payward said wallet customers will begin receiving service from Payward on August 1.
One important detail: this is an asset purchase, not a full company takeover. Magic Labs itself is not disappearing into the Kraken machine. It has rebranded as Newton Labs and will continue independently, with its focus shifting to Newton Protocol, a policy and authorization system that checks transaction conditions before onchain settlement.
What Payward is actually buying
Magic’s wallet business is wallet-as-a-service, or WaaS. That means companies can embed wallet functionality into their apps without building the full wallet stack themselves. In plain English: they get the plumbing without having to hire a whole team to reinvent the pipes.
According to the companies’ disclosure, the infrastructure has powered more than 60 million wallets and supported more than 200, 000 developers. It has also handled over $10 billion in stablecoin volume. Those are not vanity numbers cooked up for a pitch deck; they point to real distribution.
That said, “60 million wallets” is not the same thing as 60 million users. A single user can have multiple wallets, and embedded wallet systems can count instances in different ways depending on how they’re deployed. The figure still signals scale, but it should be read as wallet infrastructure usage, not a precise user count.
Embedded wallets matter because they hide a lot of the crypto friction from normal users. Nobody wants their first taste of blockchain to be a seed phrase, a dead-end UX flow, and a mild existential crisis. If embedded wallets work well, onboarding gets much easier.
The trade-off is obvious. Convenience often means more dependence on the provider behind the scenes. Some embedded wallets are user-controlled, some are custodial, and some sit somewhere in between with recovery layers and policy controls. The point is not that every embedded wallet undermines self-custody in the same way. The point is that the more seamless the experience becomes, the more invisible the infrastructure provider becomes, and invisibility tends to create power.
For readers still sorting out the basics, custodial vs. non-custodial wallets come down to one brutal question: who actually controls the keys? If a provider holds the keys, it can help with recovery and convenience, but it can also freeze access, get hacked, or simply make itself the choke point. If the user controls the keys, responsibility goes up with the freedom. No free lunch, just different flavors of risk.
Why Payward wants it
The move fits Payward’s broader strategy of building a full infrastructure platform rather than just running a trading venue. The company already operates Kraken and has been expanding into other parts of the stack, including derivatives, payments, and tokenized assets. Adding wallet rails gives Payward another way to bundle services and reduce the number of vendors its customers have to stitch together.
That logic is especially attractive for institutions. They want fewer integration headaches, fewer moving parts, and fewer places for compliance to fall apart in a spreadsheet. Payward is clearly trying to make itself look like the one-stop shop for regulated crypto infrastructure.
Mark Greenberg, Payward’s chief commercial officer, said embedded wallets are becoming foundational infrastructure and that bringing Magic’s technology in-house helps Payward offer a more complete stack without forcing customers to piece together multiple providers.
That sounds corporate, because it is. But the real message is straightforward: Payward wants more control over the plumbing, the policy layer, and the user experience. For enterprise customers, that can be a feature. For everyone who still likes the idea of crypto as a system that reduces gatekeepers, it is also a reminder that the gatekeepers rarely vanish. They just get better branding.
And for the curious who want to see how fragile wallet UX can be when users do not understand the setup, there are plenty of examples of users losing funds with non-custodial wallets simply because no one explained the basics properly. Self-custody is powerful, but it is not magic. Mess it up, and the blockchain does not send a sympathy card.
Newton Labs is betting on policy before settlement
While Payward takes over the wallet business, Newton Labs is focusing on Newton Protocol. The protocol is described as a policy and authorization system that checks transaction rules before onchain settlement. In plain English, it evaluates whether a transaction meets preset conditions before it is finalized onchain.
That approach is aimed at serious financial use cases, not just retail speculation. The company is positioning Newton Protocol for stablecoins, tokenized real-world assets, institutional vaults, and onchain financial agents that can automate actions on blockchain networks.
The first product under that umbrella is VaultKit, aimed at DeFi vault operators. Vaults are systems that manage pooled assets according to a set of rules, often through smart contracts. VaultKit is meant to add policy enforcement and authorization checks before those rules are executed.
Newton Labs says VaultKit supports Ethereum and Base. The system also integrates with RedStone, Credora, Webacy, and Chainalysis Hexagate, which points to the kind of stack this is meant for: pricing, risk checks, security monitoring, and compliance-style controls. That’s the real face of institutional crypto. Not moon charts. Not nonsense. Just a lot of machinery trying to keep money from blowing up.
Sean Li, CEO of Newton Labs, said wallet customers would begin receiving service from Payward on August 1. He also said the transition lets Newton Labs focus on Newton Protocol while the wallet business moves to an owner dedicated to that side of the platform. Clean split. Different missions. Less internal drag.
Where this fits in Payward’s bigger play
Payward’s recent moves show a company that wants to operate across more than one slice of the crypto market. In May, it completed its acquisition of Bitnomial, the CFTC-regulated derivatives firm. In July, it completed its acquisition of Reap, the Hong Kong stablecoin payments company. It also acquired NinjaTrader in 2025 and Backed Finance. The pattern is hard to miss.
This is vertical integration, crypto-style. Trading, custody, payments, derivatives, tokenized assets, and now wallet infrastructure. If the strategy works, Payward becomes easier for institutions to plug into and harder for competitors to unbundle. If it goes wrong, it becomes a bigger single point of failure.
That’s the part the industry likes to gloss over. Crypto loves talking about decentralization, but once a business wants to scale, onboard users, and satisfy regulators, it often ends up rebuilding the same old hierarchy with slightly better UX. The rails get smoother, and the concentration risk gets heavier.
There is a real upside here. Better wallet infrastructure can make crypto easier to use, especially for applications that need embedded onboarding and policy controls. Institutions do not want to assemble a Frankenstein stack of five vendors, three compliance tools, and a prayer. They want one platform and fewer surprises.
But there is also a real downside. More integration means more vendor lock-in, more policy leverage, and more dependence on a single corporate ecosystem. That matters if a platform becomes the place where access, permissions, and transaction routing all converge. Centralization is not just a philosophical complaint. It can become a very practical failure mode.
Why this deal matters
The acquisition deepens Payward’s push beyond exchange trading into a broader B2B infrastructure business. That matters because the next phase of crypto adoption is likely to be driven less by pure speculation and more by systems that can support payments, compliance, custody, and tokenized assets at scale.
Magic’s wallet business already solved part of that problem for a large developer base. Now Payward gets to fold that capability into its own platform and try to make the whole stack feel more seamless. Newton Labs, meanwhile, gets to focus on a different problem: how to put rules around onchain activity before the transaction is settled.
It is a neat division of labor, and it makes sense. But it also shows where the market is heading. The crypto stack is getting more useful, more regulated, and more centralized all at once. Progress rarely arrives without a bill attached.
Key takeaways
- What did Payward agree to buy?
Payward agreed to buy Magic Labs’ wallet-as-a-service business in an asset purchase. It is not buying Magic Labs as a whole. - How big is the wallet business?
According to the companies’ disclosure, it has powered more than 60 million wallets, served more than 200, 000 developers, and processed over $10 billion in stablecoin volume. - Is that the same as 60 million users?
No. Wallet counts are not the same as user counts. A single user can have multiple wallets, and embedded wallet systems may count instances differently. - What is Newton Labs doing now?
Magic Labs has rebranded as Newton Labs and is focusing on Newton Protocol, a policy and authorization system for pre-settlement transaction checks. - What is VaultKit?
VaultKit is Newton Protocol’s first product. It is aimed at DeFi vault operators and is built around policy enforcement before execution. - Why does Payward keep buying more infrastructure?
Payward is building a broader crypto platform that spans trading, custody, payments, derivatives, tokenized assets, and wallets. That can improve adoption, but it also concentrates more control in one ecosystem. - Should anyone expect a public market reaction?
Not really. Payward and Newton Labs are private, and there is no publicly traded token directly tied to the deal.
Payward is no longer acting like a company that just wants to run a big exchange and collect fees. It is building a regulated crypto infrastructure machine. That may be exactly what institutions want. It may also be exactly the kind of centralization crypto was supposed to avoid.
Better UX, more adoption, more compliance, and fewer illusions about who holds the keys.
Further reading
A few related Payward moves and follow-ups worth keeping on the radar:
- Kraken parent buys wallet business powering 60 million users
- Kraken parent Payward to acquire Magic Labs' embedded
- Kraken Parent Payward Revenue Rises 3% to $507M as derivatives boom in Q1 2026
- Kraken Revenue Rises 3% as Bitcoin Slumps, Derivatives Drive Growth and IPO Delays
- Kraken’s $550M Bitnomial Buyout: Revolutionizing US Crypto Derivatives Market
