Payward, the parent company of cryptocurrency exchange Kraken, has signed a definitive agreement to acquire the embedded wallet business unit of Magic Labs, a move that expands its Web3 infrastructure offerings for developers and institutional clients. The asset purchase is the latest step in Payward’s broader push across multiple parts of the digital asset ecosystem.

Under the terms of the agreement, Payward and Magic Labs will continue to operate as separate legal entities after the transaction closes. Users of the embedded wallet platform will transition to Payward Services, while the rest of Magic Labs will be rebranded and continue commercially under the name Newton Labs.

The acquisition transfers Magic Labs’ embedded wallet business to Payward Services and adds technology that has powered more than 60 million digital wallets and supports over 200,000 developers. Since its launch in 2018, Magic Labs has built embedded wallet technology that allows developers to integrate digital asset custody features into consumer and institutional applications without forcing users to manage complex wallet setups. According to company information, the technology has helped create more than 60 million digital wallets and is used by more than 200,000 developers worldwide.

The deal expands Payward Services’ capabilities by adding wallet infrastructure designed to support custody solutions across a wide range of blockchain applications. It also fits into Payward’s broader strategy of building an integrated ecosystem for both enterprise customers and software developers seeking Web3 infrastructure, an area where wallet tools are becoming a basic layer for apps that want to connect users to blockchain features without making them handle the technical details directly.

Newton Labs to focus on decentralized infrastructure

After the transaction is completed, Newton Labs will focus exclusively on the Newton Protocol, an authorization layer intended to enforce compliance, security, and risk management requirements before blockchain transactions are finalized. The protocol entered mainnet beta testing in June 2026, marking the company’s shift into a dedicated decentralized infrastructure provider.

The first product on the Newton Protocol is VaultKit, a modular platform built for institutional-grade digital asset vaults. According to the company, the system is designed to execute pre-settlement policies covering real-world assets, stablecoins, and automated financial services powered by smart agents. By applying compliance and security controls before transactions are settled on-chain, the platform aims to improve operational oversight for institutional users while supporting emerging blockchain-based financial applications.

Magic Labs said in an X post that it is becoming Newton Labs and that its wallet business, which serves more than 60 million wallets, now has a new home at Payward and Kraken. The company said its focus is now the authorization layer for onchain finance and directed users to follow @newton_xyz for more information. The post also linked to coverage by The Block.

Sean Li also posted on X that Magic Labs had announced two decisions: the sale of its wallet business to Payward, the company behind Kraken, and the transition of Magic Labs into Newton Labs. He said onboarding the world was part one of the mission, while securing the capital that follows is part two, and included a video link in the post.

Payward’s broader acquisition strategy

The wallet acquisition is the latest in a series of strategic transactions by Payward. Earlier this year, the company completed the acquisition of CFTC-licensed derivatives exchange Bitnomial in a deal valued at up to $550 million in cash and stock. That deal followed a separate $600 million agreement to acquire Hong Kong-based Reap Technologies, which specializes in stablecoin payment solutions.

Payward’s expansion strategy also includes the 2025 acquisition of retail futures trading platform NinjaTrader for $1.5 billion. Industry reports have said these transactions are part of a broader vertical integration strategy aimed at combining cryptocurrency spot trading, derivatives markets, payment infrastructure, and digital wallet services under a unified corporate structure.

The latest deal adds to Payward’s recent acquisitions of Bitnomial, Reap Technologies, and NinjaTrader, reflecting a plan to integrate trading, payments, derivatives, and wallet infrastructure into a wider digital asset ecosystem.

The transition of the embedded wallet business to Payward Services is expected to close after customary closing conditions are satisfied. Once completed, users of the wallet infrastructure will receive services through Payward, while Newton Labs continues developing decentralized infrastructure technologies centered on the Newton Protocol.

The agreement further strengthens Payward’s position in the Web3 infrastructure market by expanding its developer-focused services and institutional capabilities, while allowing Newton Labs to concentrate on compliance-driven decentralized infrastructure.