Kraken’s parent company, Payward, is making a significant move in the crypto space by acquiring the wallet-as-a-service business of Magic Labs. The deal, announced on July 27, involves an asset purchase that will integrate infrastructure supporting over 60 million wallets into Payward's ecosystem.
Adding a Trusted Wallet Layer
Rather than acquiring the entire Magic Labs company, Payward purchased the embedded non-custodial wallet infrastructure. This platform has been responsible for processing more than $10 billion in stablecoin transactions and serving 200,000 developers since Magic Labs launched in 2018. The technology includes a signing system based on a trusted execution environment, an embedded integration layer, and a software development kit for developers.
Once integrated into Payward Services, the wallet layer will enable Payward’s partners including banks, fintech firms, exchanges, and onchain apps to add self-custodial wallets without juggling multiple infrastructure providers. Users remain in control of their assets, maintaining custody rather than transferring it directly under Payward, though the user experience might differ by business.
Transition and Future Focus for Newton Labs
Following the deal, Magic Labs rebranded as Newton Labs and will continue operations independently, focusing on its Newton Protocol. This new focus is a protocol designed to verify transactions against preset security, identity, compliance, and risk policies. The mainnet beta of Newton Protocol launched on June 23. Newton Labs’ CEO Sean Li confirmed that current Magic wallet customers will switch to Payward Services starting August 1, with no disruptions or required actions from users during this transition. The acquisition’s finalization depends on customary closing conditions within the coming weeks.
Magic Labs had previously raised over $80 million in funding, including a $52 million strategic round spearheaded by PayPal Ventures earlier this year. This investment wave also involved Cherubic, Synchrony, KX, Northzone, and Volt Capital backing the company.
Payward aims to merge Magic’s wallet technology with its existing B2B platform, which already offers trading, custody, tokenized assets, derivatives, and fiat-to-crypto payment services under a single integration. This move should simplify how financial and crypto businesses deploy wallet solutions.
