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Payward Acquires Magic Labs Embedded Wallet Business
Payward Acquires Magic Labs Embedded Wallet Business

Transaction Overview
On July 27, 2026, Payward, the B2B crypto infrastructure parent behind the crypto exchange Kraken, announced a definitive agreement to acquire wallet-as-a-service business Magic Labs. Financial terms of the transaction were not disclosed.

Target: Magic Labs (Wallet Infrastructure)
Founded in 2018 and headquartered in San Francisco, Magic Labs is a wallet-as-a-service infrastructure provider that enables businesses to create non-custodial embedded wallets for their end users. The company was co-founded by Sean Li, Arthur Jen, and Jaemin Jin.

Magic’s core offering is a developer-facing SDK and API that provides embedded wallets with passwordless authentication via email, social login, passkeys, or SSO. The product suite includes 1) API Wallets for server-side management with security and customizable key sharding, and 2) Embedded Wallets for client-side non-custodial key management. As of July 2026, the platform supports more than 30 blockchain networks and provides a white-label UI, fiat onramps, and transaction signing.

As of July 2026, Magic Labs had provisioned more than 60 million wallets and served more than 200,000 developers across more than 18,000 applications. Clients include Polymarket, Naver, Helium, Forbes, WalletConnect, Mattel, and Immutable. During the 2024 U.S. presidential election, Polymarket processed over $3 billion in prediction market transactions with zero downtime, powered by Magic’s embedded wallets. Magic said it had supported over $8.9 billion in cumulative transaction volume for Polymarket as of November 2025.

Magic Labs has raised a total of $83 million in disclosed venture funding across 4 rounds, with significant investors including PayPal Ventures, Northzone, Tiger Global, Digital Currency Group, CoinFund, and Placeholder VC.

In November 2024, Magic Labs announced Newton, a chain unification network built in collaboration with Polygon Labs, expanding beyond wallet infrastructure into cross-chain protocol development. In November 2025, Magic Labs integrated the Newton Protocol SDK across its developer network. The company described Newton Protocol as “the authorization layer for on-chain finance.” These moves preceded the company’s decision to divest its wallet business and refocus entirely on protocol development.

Buyer: Payward
Founded in 2011 and headquartered in San Francisco, Payward is a private B2B crypto infrastructure holding company. Payward operates Kraken, one of the longest-running cryptocurrency exchanges, alongside NinjaTrader, xStocks, Bitnomial, and CF Benchmarks. The company is led by co-CEOs Arjun Sethi and Dave Ripley.

Most relevant to this transaction, Payward operates Payward Services, a B2B infrastructure platform that provides institutions with access to Payward’s trading, custody, settlement, and payments infrastructure via API. The acquisition of Magic Labs adds embedded wallet infrastructure to their offering. In April 2026, Payward launched a white-label fiat-to-crypto onramp through a partnership with Onramper, making embedded wallet infrastructure a natural adjacent capability.

Payward has been expanding beyond its core exchange through acquisition. In 2025, the company acquired NinjaTrader for $1.5 billion (retail futures, M&A Alert) and agreed to acquire Backed Finance (tokenized equities, Press). In 2026, it acquired Magna (token lifecycle management, Press), completed the acquisition of Bitnomial for up to $550 million (regulated derivatives, M&A Alert), and agreed to acquire Reap for $600 million (card issuance and payments, M&A Alert). Including this transaction, Payward has announced or completed 8 acquisitions since early 2025, committing several billion dollars to platform expansion ahead of its planned public listing.

For the full year of 2025, Payward reported adjusted revenue of $2.2 billion, a 33% increase year over year from $1.5 billion in 2024. Trading-based revenue accounted for 47% of the total, with the remaining 53% from asset-based services, including payments, custody, yield, and financing.

In November 2025, Payward raised $800 million at a $20 billion post-money valuation in a round backed by Citadel Securities, Jane Street, and Apollo Global Management, and confidentially filed an S-1 with the SEC ahead of a planned IPO. In April 2026, Deutsche Börse Group made an additional $200 million strategic investment in the company.

Transaction Parameters
Payward has signed a definitive agreement to acquire the wallet-as-a-service business of Magic Labs for an undisclosed amount. The transaction includes Magic Labs’ embedded wallet business, including wallet clients and associated infrastructure.

The transaction is part of a broader corporate restructuring in which Magic Labs is rebranding as Newton Labs to focus on the Newton Protocol. The two companies will remain independent following the close.

Architect Partners served as the exclusive financial advisor to Magic Labs.

Strategic Rationale
Payward is acquiring Magic’s embedded wallet business to augment Payward Services’ B2B offering. Payward Services gives partners a single integration point for trading, custody, tokenized assets, on/off-ramps, and derivatives. The wallet, the account layer where end users actually hold assets and interact with onchain products, was a critical piece partners still had to source from a third party. Magic brings that layer in-house with proven infrastructure: a TEE-based signing solution, an embedded integration layer, and a developer SDK that together have provisioned more than 60 million wallets and supported over $10 billion in stablecoin volume for 200,000+ developers.

On Day 1, Payward can offer fintechs, enterprises, and financial institutions a complete embedded onchain offering under a single provider, spanning wallet provisioning, onboarding, funding, trading, custody, and settlement, without stitching together multiple vendors. Every embedded wallet also becomes a distribution point that routes transaction volume into the rest of Payward’s infrastructure, deepening the non-trading, less volatile revenue that already accounts for 53% of Payward’s total as it heads toward a public listing.

Architect Partners’ Observations
This transaction marks the near-completion of a consolidation wave in embedded wallet infrastructure. In roughly one year, Fireblocks acquired Dynamics ($90M), Consensys acquired Web3Auth ($50M), Stripe acquired Privvy, Ripple acquired Palisade, and Paxos acquired Fordefi. Now each group has its own independent wallet infrastructure provider, and Payward has acquired the category’s pioneer. The market has reached a clear verdict: embedded wallets are foundational infrastructure for every onchain product, and they are a layer of a full-stack platform rather than a standalone business.

The logic is simple: the wallet is becoming the account primitive of onchain finance. Whoever provisions the wallet sits at the front of the customer relationship and routes the volume that follows. For platforms whose trading revenue is inherently cyclical, owning the onboarding layer converts market position into durable, recurring B2B infrastructure revenue.

Sources
Press Release, Payward Services, PitchBook

Alerts

Crusoe Energy Selling Its Bitcoin Mining Unit to NYDIG

John Kennick
March 31st, 2025
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Transaction Overview

On March 25th, 2025, Crusoe Energy, historically offering flare-gas powered bitcoin mining, announced its divestiture of its bitcoin mining unit to NYDIG, a bitcoin miner that also provides custody solutions.

 

Target: Crusoe Energy (Crypto Mining Unit)

Crusoe Energy, founded in 2018 and headquartered in Denver, CO, is an operator of mobile modular data centers that convert waste-gas to energy for AI and Crypto-mining use cases. The company employs approximately 550 employees with 135 of those being part of the crypto-mining unit. 

 

Crusoe Energy’s Crypto-Mining Unit consists of 425 modular data centers across the U.S. and Argentina, representing about 270 MW of power. It also possesses a digital flare mitigation technology, which captures natural gas from oil fields that would have otherwise been burned off into the air as a “flare” and converts this stranded energy into electricity to power modular data centers co-located onsite in the oilfield. This solution has mitigated 2.7 million metric tons of GHG emissions and prevented 22 billion cubic feet of natural gas from being flared, which is equivalent to 630k cars / year of emissions. 

 

This transaction came alongside a debt-raise of $225M with the use of funds being the purchase of NVIDIA GPUs and supporting cloud infrastructure for their AI-initiatives. Prior to this announcement, the company had raised $1.6B in capital at a $2.8B post-valuation. Relevant investors include Bain Capital Ventures, Valor Equity Partners, KCK Group, and Long Journey Ventures that hold board seats and other top investors like G2 Venture Partners, Founders Fund, Lowecarbon Capital, Polychain Capital, DRW Ventures, CMT Digital and 37 others. 

 

Buyer: NYDIG

NYDIG, founded in 2017 and headquartered in New York, NY, is a crypto company whose operations can be split into 1) a bitcoin mining operation consisting of hundreds of thousands of ASIC miners and 2) and a digital asset infrastructure solution, which includes institutional custody, spots & derivatives trading and bitcoin-collateralized “HODL loans.” 

 

Last year, the company had made an investment in Coinmint, a NY-based colocation provider, to capture space for NYDIG’s hashrate and the business has been acquiring other mining operations like Consensus Technology Group, some of Greenidge Generation’s machines within the past two years.

 

The company was last valued at $7 billion following a $1 billion growth round led by WestCap in December 2021. Other notable investors include New York Life Insurance, Bessemer Venture Partners, David Heller, FinTech Collective, Morgan Stanley, Massachusetts Mutual Life insurance, Ribbit Capital and 17 more. 

 

Transaction Parameters

Notable crypto mining transactions in the last twelve months include Stronghold Digital | Bitfarms for $175M, Block Mining | Riot Blockchain for ~$93M, Griid | Cleanspark for $155M, Desiwiminer | BitDeer for $140M, and Applied Digital Sites | Marathon for ~$87M. 

 

Strategic Rationale

This divestiture is part of Crusoe Energy’s pivot away from crypto-mining into AI, which is expected to consume over 8% of global electricity by 2030. It also represents a pivot for the business away from its flare gas technology and mitigation to a renewable energy powered future. Not only did it sell the technology, but its next AI data center, expected to be online by 2026 will be powered by a combination of wind, solar, and natural gas. 

 

On the other side of the transaction, the acquisition of Crusoe’s mining unit enhances the scale and efficiency of NYDIGs and Stone Ridge Holdings mining and natural gas operations. Notably NYDIG is also an affiliate of Stone Ridge Holdings Group, which has access to 10GW of U.S. natural gas production, from which the stranded energy available could be used to power bitcoin mining operations at lower input costs. 

 

Architect Partners’ Observations

This transaction begs the question, is Bitcoin mining the “highest and best use” for a datacenter business. Fundamentally Bitcoin mining is operating specialized computers, at scale, in the most economically efficient fashion possible. Bitcoin mining has evolved to favor the large operators. That is those who have access to large pools of low cost capital and have purchasing power (i.e. ability to get discounts) for both electricity and mining rigs. Small and mid-sized Bitcoin mining businesses have some level of disadvantage which in some cases have put stress on their operations. On top of all that, 90% of the “revenue” (i.e. Bitcoin from the protocol reward), fluctuates in price, making planning a challenge. No different than commodity-based physical mining operations or even oil & gas exploration and refining. Nonetheless, a challenge.

 

Is repurposing for AI workload a solution? Are not the fundamental drivers of success as highlighted above the same? Is going directly up against hyperscalers such as Google, Microsoft and Amazon prudent? Time will tell.

 

Sources 

PitchBook, Crusoe Press Release, NYDIG Press Release, Bitcoin.com