TheBlock
Payward, the parent of crypto exchange Kraken, has agreed to acquire the embedded wallet business of Magic Labs, the company said Monday. Magic has created more than 60 million wallets since 2018, and the unit will be folded into Payward's broader crypto infrastructure stack. The team behind Magic's core protocol layer is spinning out as Newton Labs, where it will focus on Newton Protocol, an authorization layer for onchain finance.
Why it matters
Embedded wallets are the on-ramp for consumer-facing crypto apps, letting users sign in with an email or social login and skip seed phrases. Acquiring Magic gives Payward a turnkey developer stack to ship wallet-as-a-service to its own exchange customers and to external builders, putting Kraken in closer competition with the likes of Privy, Web3Auth, and dynamic custody providers. The deal also consolidates wallet infrastructure inside one of the few US-regulated venues with enough distribution to monetize it.
Market impact
The Newton Labs spinout keeps the protocol layer independent and vendor-neutral, which matters for the apps already building on Magic's APIs. Developers should expect continuity on the existing product while Kraken integrates the wallet stack behind the scenes. Watch for institutional custody crossover, where a regulated exchange-owned embedded wallet becomes a credible distribution channel for tokenized RWAs and onchain finance products.
Frequently asked questions
-
Who acquired Magic Labs' embedded wallet business?
Payward, the parent company of crypto exchange Kraken, agreed to acquire the embedded wallet business of Magic Labs, the company said Monday.
-
How many wallets has Magic Labs created?
Magic Labs said it has created more than 60 million wallets since 2018, across consumer apps that use email or social-login sign-in and skip seed phrases.
-
What is Newton Labs and what does it focus on?
Newton Labs is the spinout that houses the core team behind Magic's protocol layer. It will focus on Newton Protocol, an authorization layer for onchain finance.
-
Why does an exchange owning embedded wallet infrastructure matter?
Embedded wallets are the on-ramp for consumer-facing crypto apps. Owning the stack lets a regulated US exchange ship wallet-as-a-service to its own customers and external builders, competing with Privy, Web3Auth, and dynamic custody providers.
-
Will developers building on Magic's APIs see disruption?
The Newton Labs spinout keeps the protocol layer independent and vendor-neutral. Developers should expect product continuity while Kraken integrates the wallet stack behind the scenes.
CryptoSlate
CoinDesk
CoinTelegraph
WuBlockchain