Kraken parent buys wallet business powering 60 million users

Payward, the parent company of Kraken, entered a definitive agreement on July 27 to acquire Magic Labs’ wallet-as-a-service business through an asset purchase. Financial terms were not disclosed.

The deal covers Magic’s embedded, non-custodial wallet infrastructure rather than the entire company. Magic Labs has rebranded as Newton Labs and will remain independent while focusing on Newton Protocol, its policy and authorization system for onchain transactions.

Payward plans to integrate Magic’s technology into Payward Services, its infrastructure platform for banks, fintech companies, exchanges and onchain applications. The existing platform provides trading, custody, tokenized assets, derivatives and fiat-to-crypto payment services through one integration. Magic adds a wallet layer. Its stack combines a trusted execution environment-based signing system, an embedded integration layer and a developer SDK. Payward said partners will be able to add self-custody wallets without managing several separate infrastructure providers.

The companies describe the wallets as non-custodial, meaning users retain control of their assets rather than placing them under Payward’s custody. The exact user experience and supported networks may vary between businesses using the infrastructure.

Magic’s wallet infrastructure has powered more than 60 million wallets and over $10 billion in stablecoin volume. It has served more than 200,000 developers since 2018, according to the acquisition announcement.

Newton Labs CEO Sean Li said existing wallet customers would begin receiving service from Payward on August 1. Current integrations would continue without interruption and customers would not need to take action. The legal completion of the acquisition remains subject to customary closing conditions.

Magic had previously raised more than $80 million. That total included a $52 million strategic round led by PayPal Ventures in May 2023, with participation from Cherubic, Synchrony, KX, Northzone and Volt Capital.

Newton Labs will now focus on Newton Protocol, which entered mainnet beta on June 23. The protocol checks whether transactions comply with predefined security, identity, compliance and risk rules before they settle onchain. It then generates a cryptographic record of the policy decision. Its first product, VaultKit, allows decentralized finance vault operators to apply policy checks to management actions. Newton said the software currently supports Ethereum and Base, with integrations involving risk and price providers such as RedStone and Credora, as well as security providers Webacy and Chainalysis Hexagate. Newton intends to expand the system beyond vaults to stablecoins, tokenized real-world assets and automated financial agents. Those plans remain company targets rather than completed product launches.

The Magic agreement follows several acquisitions intended to broaden Payward beyond Kraken’s spot exchange business. Payward completed its purchase of CFTC-regulated derivatives firm Bitnomial in May after announcing a deal worth up to $550 million. Payward also completed its acquisition of Hong Kong stablecoin payments company Reap in July. The transaction was initially valued at $600 million and added card issuance, cross-border settlement and stablecoin payment infrastructure to Payward Services. The company previously bought retail futures platform NinjaTrader for $1.5 billion in 2025 and tokenized securities provider Backed Finance for an undisclosed amount. Together, the deals expand Payward’s coverage across trading, wallets, payments, custody, derivatives and tokenized assets.

No verified market reaction accompanied the Magic announcement because Payward and Newton Labs are privately held, and the acquisition does not involve a publicly traded token. The next confirmed step is completion of the asset purchase. Integration of Magic’s wallet technology into Payward Services will follow.