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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

Insights

Week of November 25 – December 1

Todd White
December 4, 2024
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November 25 – December 1 (Published Dec 4th)

 

PERSPECTIVES by Todd White

 

19 Crypto Private Financings Raised: $126M

Rolling 3-Month-Average: $220M

Rolling 52-Week Average: $216M

 

Last week, I needed to make a payment to Switzerland. The invoice included a convenient QR code to make a nearly instantaneous transfer from my phone—had I been in Switzerland. However, because I was in the U.S., it took my bank four days, several emails, and a hefty fee to process and confirm the payment. Ugh.

 

Cross-border payments, global money transfers, and bank settlements are areas fraught with friction and complexity. Much of this stems from the way traditional stewards of our money—banks—interact with each other. For banks that hold direct accounts with each other, i.e., have direct mutual relationships, transactions are relatively simple and can be managed with straightforward instructions. Yet they are often still quite slow. When there is no direct relationship, they must transact through an intermediary or “correspondent” bank with whom both have a relationship, adding both time and cost to any exchange. If multiple currencies, parties, payment time requirements, or any other myriad factors arise, the relative complexity can increase geometrically. This adds more time, more cost, and more potential points of failure.

 

For these reasons, the allure of instant, immutable, and trustless settlement through blockchain networks has been palpable for years. Many believe disintermediation is the key—reducing the middlemen reduces the time and cost. Others favor wholesale disruption—eliminating the middle entirely and going peer-to-peer. Indeed, this latter sentiment spawned much of what we now call crypto in the first place. But adoption has been slow and often seemingly resisted by some of the most important institutions.

 

Yet the promise is real, and progress is happening. JPMorgan famously launched their JPM Coin in 2019 for internal use among account holders, and later its permissioned blockchain, known as Kinexys (formerly Onyx), which claims $1.5 trillion in notional value processed to date. Earlier this year, the Bank for International Settlements—a clearinghouse of sorts for national central banks—published a white paper envisioning a blockchain-enabled “Finternet,” an ambitious plan requiring broad collaboration among public and private institutions. There are numerous other initiatives, both large and small, seeking to augment or disrupt institutional capabilities—through stablecoins, on/off ramps, peer-to-peer payments, or DeFi protocols.

 

One of these projects, Partior, landed $20M from Deutsche Bank last week in follow-on to its June Series B. This brings total Series B proceeds to $80M and adds Deutsche Bank to ranks that include JPMorgan, DBS, Temasek, and Standard Chartered (who led their $31M Series A in 2022). Partior’s goal is to reduce friction and delay in cross-border payments, trade, and FX settlements through its “global unified ledger” settlement network—an on-chain bridge for real-time clearing and settlement among financial institutions.

 

I can’t say how soon this or other systems will help me send money quickly and cheaply to Switzerland. But it certainly sounds like progress.

 

Contact ryan@architectpartners.com to schedule a meeting.