Kraken’s parent company just made a quiet but consequential move in the embedded wallet space. Payward acquired Magic Labs’ embedded wallet business through an asset purchase, according to The Block, folding the operation into Payward Services. The financial terms were not disclosed — but the strategic logic is hard to miss.
Summary
Key takeaways
- Payward, Kraken’s parent company, acquired Magic Labs’ embedded wallet business via an asset purchase.
- The wallet business will move to Payward Services as part of the integration.
- Magic Labs will rebrand as Newton Labs and pivot to developing Newton Protocol.
- Magic Labs had raised more than $80 million in total funding, including a $52 million round led by PayPal Ventures in 2023.
- No financial terms for the acquisition were disclosed.
Payward Acquires Magic Labs’ Embedded Wallet Business
Embedded wallets have become one of the most contested pieces of crypto infrastructure — and Payward just secured a meaningful one. By acquiring Magic Labs’ wallet business outright, rather than partnering or licensing, Payward brings the technology in-house under a structure it can control and build on directly.
What the asset purchase means in practice
The deal was structured as an asset purchase, meaning Payward acquired the wallet business itself rather than absorbing Magic Labs as a company. That distinction matters. It lets both sides move cleanly: Payward gets the product and underlying infrastructure, while Magic Labs — soon to be Newton Labs — walks away with the freedom to pursue a completely different direction.
Post-acquisition, the embedded wallet operation moves to Payward Services, the division of the Kraken parent focused on infrastructure and service offerings. That positioning suggests Payward sees the wallet capability not just as a standalone product, but as a building block for broader offerings it can layer into its ecosystem.
Magic Labs Becomes Newton Labs
Rather than quietly folding, Magic Labs is using the acquisition as a launchpad for reinvention. The company will rebrand as Newton Labs and shift its focus entirely to Newton Protocol — a move that signals the team’s ambitions extend well beyond where the embedded wallet product was heading.
It’s a clean break by design. Selling off the wallet business frees up resources and attention for protocol-level work, which tends to operate on a very different development timeline and requires a different kind of organizational focus than a B2B infrastructure product does.
Magic Labs’ Funding History Puts the Deal in Context
Understanding the scale of Magic Labs’ backing helps frame what Payward actually acquired. The company had raised more than $80 million in total funding before this deal — a figure that reflects serious investor conviction in its wallet technology.
The PayPal Ventures-led round
The most notable fundraise came in 2023, when PayPal Ventures led a $52 million round for Magic Labs. That kind of institutional backing — from the financial arm of one of the world’s largest payments companies — underscored the perceived value of embedded wallet infrastructure at the time. It also makes the eventual sale to Payward all the more interesting: a product that once attracted PayPal Ventures capital is now inside the Kraken ecosystem.
Why the Undisclosed Terms Leave Questions Open
The fact that financial terms were not disclosed is itself notable. In a market where deal valuations often get amplified as signals of sector health, the silence here limits what observers can read into the transaction. It’s impossible to assess whether this was a premium acquisition or a strategic sale at a discount — and that ambiguity cuts both ways.
What the deal does confirm, regardless of price, is that embedded wallet technology remains a priority infrastructure layer for major crypto platforms. Payward isn’t building in a vacuum; it’s consolidating capabilities that took competitors years and tens of millions of dollars to develop. Whether the integration into Payward Services delivers on that promise is the real question now — and the answer will only become visible over time.
FAQ
Who acquired Magic Labs’ embedded wallet business?
Kraken’s parent company, Payward, acquired Magic Labs’ embedded wallet business through an asset purchase.
How was the acquisition structured?
The acquisition was completed as an asset purchase, meaning Payward acquired the wallet business and its underlying assets rather than taking over Magic Labs as a whole company.
What will happen to Magic Labs after the acquisition?
Magic Labs will rebrand as Newton Labs and redirect its focus to developing Newton Protocol, leaving the embedded wallet business entirely with Payward.
What is known about Magic Labs’ funding history?
Magic Labs raised more than $80 million in total funding, including a notable $52 million round led by PayPal Ventures in 2023.
Article produced with the assistance of artificial intelligence and reviewed by the editorial team.
