Deutsche Börse AG has acquired a $200 million stake in crypto exchange Kraken's parent company, Payward Inc., valuing the digital asset firm at $13.3 billion. This investment, expected to close in the second quarter pending regulatory approval, deepens an existing partnership between the two entities.
The deal underscores a broader trend of traditional financial institutions increasing their involvement in the digital asset space, particularly around tokenized assets. Experts suggest this consolidation is driven by a need for established players to gain an edge in a rapidly evolving market, with compliance emerging as a key competitive advantage.
This move by Deutsche Börse, the operator of the Frankfurt stock exchange, mirrors similar investments from other major financial players. The transaction values Kraken at a decrease from its previous fundraising round valuation, reflecting market dynamics.
Deutsche Börse and Kraken's partnership, initially announced in December, focuses on FX liquidity, custody, settlement, collateral management, and tokenized assets. This collaboration has already seen Kraken integrate with 360T, a Deutsche Börse subsidiary, providing clients access to FX liquidity, and the launch of xStocks on Deutsche Börse's 360X trading venue, enabling the trading of blockchain-based tokens representing real equities and ETFs.
Kraken had previously confidentially filed for an IPO and is exploring other avenues for public market engagement, including a SPAC sponsored by an affiliate that is seeking acquisition targets. Amidst these strategic moves, Kraken is also addressing a recent extortion threat involving customer data, stating it will not pay criminals and is cooperating with law enforcement.