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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

Uncategorized

FalconX Acquires Arbelos Markets for an Undisclosed Amount

Michael Klena
January 3rd, 2025
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Transaction Overview

On January 3, 2025, FalconX, a crypto prime brokerage firm, announced its acquisition of Arbelos Markets, a crypto-focused trading firm that provides principal liquidity across the crypto derivatives market, for an undisclosed valuation

 

Target: Arbelos Market

Arbelos Markets, established in 2023, specializes in providing liquidity solutions for cryptocurrency derivatives markets. The company offers a range of services, including spot trading, options, and futures contracts. Additionally, it operates a bilateral trading platform and provides advisory services focused on cryptocurrency hedging and yield optimization strategies.

 

Since its inception, Arbelos Markets has been delivering derivatives trading across both exchange-traded and bilateral markets. The firm has consistently maintained its position as a global liquidity provider for large options blocks by facilitating access to highly liquid trading opportunities across crypto-native platforms, traditional financial venues, and on-chain protocols.

 

Founded in 2023 by Joshua Lim and Shiliang Tang and headquartered in the British Virgin Islands, the company previously raised $56 million in seed funding, with $28 million coming from debt. Dragonfly Capital led the round, with participation from FalconX, Paxos, Deribit, StarkWare, Immutable, Chorus One, P2 Ventures, Circle Ventures, Room40 Ventures, Selini Capital, and Breed VC.

 

Buyer: FalconX

FalconX is a digital asset prime brokerage providing trading, financing, and technology solutions to institutional clients. Its offerings include: 1) FalconX 360, an end-to-end platform supporting the trade lifecycle, 2) derivatives products, 3) financing solutions, and 4) FX services for fiat and crypto-fiat pairs. 

 

FalconX Bravo, an affiliate of FalconX, became the first CFTC-registered swap dealer focused exclusively on cryptocurrency derivatives.

 

As of July 1, 2024, FalconX had executed over $1.5 trillion in trading volume, served more than 600 institutional clients, and provided access to 400+ tokens. In early 2024, the company facilitated over 30% of total BTC creation purchases for ETF sponsors on their inaugural trading day.

 

Founded in 2018 by Prabhakar Reddy and Raghu Yarlagadda and headquartered in San Mateo, California, FalconX employs over 380 people across offices in New York City, San Francisco, London, Malta, Bangalore, Hong Kong, and Singapore. The company has raised $477 million across eight funding rounds, with backing from B Capital, Altimeter Capital, Accel, Tiger Global, and American Express Ventures, among others. FalconX was last valued at $8 billion in 2022.

 

Transaction Parameters

FalconX closed on the acquisition of Arbelos Market for an undisclosed amount through a mix of cash and stock.

 

Previous comparable transactions include: Stillman Digital | DeFi Technologies, Flovtec | STS Digital, CTF Capital | Borderless Capital, FairX | Coinbase, ErisX | CBOE

 

Strategic Rationale

This acquisition strengthens FalconX’s position as a leading player in institutional trading facilitation. By acquiring a block-trading and OTC derivatives market liquidity provider, FalconX is expanding the range of services available to its existing clients while bringing more of the trading cycle in-house. Moving operations in-house not only allows FalconX to capture an increased share of trade revenues but also ensures that client needs are consistently met.

 

Through this acquisition, FalconX enhances its OTC offerings, complementing its regulated services. The race for leadership in derivatives is intensifying, with several players aggressively expanding in this product segment. FalconX is broadening its product suite to position itself among the leading contenders in the market.

 

Architect Partners’ Observations

This is a logical deal, and we expect more of these to come due to several factors. 

 

Derivatives are a higher-margin product than spot trading, so firms will look to expand their offerings as trading fees are compressed. A similar pattern occurred in U.S. equity trading once it became commoditized in the early 2000s—firms pushed to expand their higher-margin derivatives offerings, often through acquisitions.

 

There is more supply as several newly launched crypto derivatives firms, like Arbelos, D2X, and One Trading, have entered the market. It’s a unique point in time where there is no dominant player preventing others from launching and finding traction.

 

There is growing demand as regulatory changes (e.g., ETF approvals) and (optimistically) upcoming crypto-friendly frameworks have increased institutional trading. Increasing demand means larger firms can now act more aggressively to acquire and feel confident they will not fall into the crosshairs of regulators while expanding their product offerings.

 

There are precedents. Coinbase bought FairX in 2022 (now Coinbase Derivatives), and CBOE acquired ErisX in 2021 (which they wrote down). Timing was a bit early on those deals due to the previously unseen regulatory changes, but we are now hearing that the timing looks more favorable.

 

Sources 

PitchBook, PR Newswire, FalconX