Key Highlights
- On July 27, 2026, Payward, the parent entity behind Kraken, announced an agreement to purchase Magic Labs’ wallet-as-a-service division
- The acquired infrastructure supports more than 60 million non-custodial wallets and has facilitated $10 billion in stablecoin transaction volume
- Payward Services, the company’s B2B division, will integrate this embedded wallet technology into its existing platform
- Magic Labs is transitioning to Newton Labs, maintaining independence while concentrating on the Newton Protocol
- Current Magic wallet clients will transition to Payward Services from August 1 without requiring manual migration
The parent organization behind cryptocurrency exchange Kraken, Payward, has entered into an agreement to purchase the wallet-as-a-service division from Magic Labs. This July 27 announcement details an asset purchase arrangement focused specifically on Magic’s embedded wallet technology, not the complete company acquisition.
Neither party revealed the financial details of the transaction. Both organizations anticipate finalizing the deal in the coming weeks, pending customary closing requirements.
Magic Labs’ Infrastructure Capabilities
Since its 2018 inception, Magic Labs has developed technology that supports over 60 million non-custodial wallets. The platform has catered to more than 200,000 developers and facilitated over $10 billion in stablecoin transaction volume.
This infrastructure will integrate into Payward Services, Kraken’s enterprise-focused platform. The existing platform already provides trading capabilities, custody solutions, tokenized asset services, derivatives products, and fiat-to-crypto payment rails.
The integration of wallet technology enables enterprise customers to embed self-custody wallet functionality directly within their proprietary applications. This eliminates dependency on external wallet service providers.
Magic’s technology architecture incorporates a trusted execution environment for signing operations, an embedded integration framework, and a comprehensive developer software development kit.
These wallets operate on a non-custodial basis, preserving user control over digital assets. Network compatibility and specific user interfaces will depend on individual business implementations.
Sean Li, CEO of Newton Labs, confirmed that existing clients will receive support from Payward beginning August 1. All current integrations will maintain operational continuity throughout the transition.
Newton Labs’ Strategic Pivot to Newton Protocol
Following the wallet business sale, Magic Labs has transformed into Newton Labs and will operate independently. The company’s focus shifts entirely to Newton Protocol, which launched its mainnet beta on June 23.
Newton Protocol functions as a pre-settlement verification layer, evaluating transactions against established security, identity, compliance, and risk parameters before blockchain finalization. The system generates cryptographic attestations documenting these policy determinations.
VaultKit, the inaugural offering, enables decentralized finance vault administrators to implement policy verification for management operations. Present compatibility includes Ethereum and Base networks, with technical partnerships from RedStone, Credora, Webacy, and Chainalysis Hexagate.
Newton Labs has outlined expansion plans encompassing stablecoins, tokenized real-world assets, and autonomous financial agents. These represent planned developments rather than existing products.
Previously, Magic secured more than $80 million in funding, highlighted by a $52 million investment round spearheaded by PayPal Ventures in May 2023.
Payward’s Strategic Acquisition Strategy
This transaction represents one component of Payward’s comprehensive expansion initiative. Earlier acquisitions include CFTC-regulated derivatives platform Bitnomial for up to $550 million in May, and Hong Kong-based stablecoin payment provider Reap in July.
Additional purchases encompass retail futures trading platform NinjaTrader for $1.5 billion in 2025, and tokenized securities provider Backed Finance for undisclosed terms.
Collectively, these strategic acquisitions broaden Payward’s operational footprint across digital asset trading, wallet services, payment processing, custody operations, derivatives markets, and tokenized asset infrastructure.
Given that both Payward and Newton Labs operate as private entities, public market reaction metrics for this transaction are unavailable.
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