Key Highlights Payward Services acquires Magic Labs’ embedded wallet division Company undergoes rebrand to Newton Labs with institutional finance emphasis Current wallet users to migrate to P
Payward Services acquires Magic Labs’ embedded wallet division
Company undergoes rebrand to Newton Labs with institutional finance emphasis
Current wallet users to migrate to Payward Services following deal completion
Newton Protocol emphasizes pre-settlement compliance and security verification
Kraken parent continues strategic acquisition spree in crypto infrastructure
In a strategic restructuring move, Magic Labs has finalized an agreement to divest its embedded wallet operations to Payward, which operates the prominent cryptocurrency exchange Kraken. Through this asset divestiture, wallet services will migrate to Payward Services as Magic Labs undergoes a transformation into Newton Labs. This strategic pivot redirects the company’s focus toward building institutional-grade onchain finance infrastructure while simultaneously broadening Payward’s comprehensive digital asset ecosystem.
This arrangement represents an asset divestiture rather than a full corporate acquisition. The organizations will maintain their independence and continue separate operations. Current wallet users will undergo a transition process to Payward Services following the transaction’s completion.
Since its inception in 2018, Magic Labs has successfully deployed over 60 million embedded wallets across various platforms. The company has cultivated a developer community exceeding 200,000 individuals spanning consumer-facing and institutional implementations. These solutions positioned Magic Labs as a leading embedded wallet infrastructure provider in the cryptocurrency space.
Following the deal’s closure, Magic Labs will adopt the Newton Labs identity. The newly branded entity will dedicate its resources exclusively to advancing the Newton Protocol for institutional onchain finance applications. This protocol implements compliance verification, security protocols, identity authentication, and risk assessment mechanisms prior to blockchain transaction finalization.
Newton Labs initiated the mainnet beta release of its Newton Protocol in June 2026. This infrastructure introduces an authorization framework that validates transaction prerequisites before execution. Enterprises can implement customized policy frameworks directly into their transaction processing pipelines.
VaultKit represents the inaugural protocol-powered offering, designed for institutional digital asset storage solutions. This product facilitates modular policy implementation encompassing regulatory compliance, identity confirmation, security protocols, and transaction risk evaluation. Financial institutions can integrate automated internal governance mechanisms before finalizing blockchain-based transfers.
The company has outlined ambitious expansion plans for the protocol across stablecoin infrastructure, tokenized traditional assets, and autonomous finance implementations. Newton Labs aims to facilitate blockchain interoperability and diminish network fragmentation challenges. The firm maintains its partnership with Polygon AggLayer to enhance cross-chain functionality.
This transaction represents another milestone in Payward’s ambitious expansion campaign throughout 2026. The company previously finalized its purchase of derivatives platform Bitnomial for a total consideration of up to $550 million combining cash and equity. Payward also entered into an agreement to purchase Hong Kong stablecoin payment processor Reap Technologies for approximately $600 million.
Additional acquisitions encompass Backed Finance and Magna, extending Payward’s operational footprint across tokenized securities and digital asset management platforms. The Magic Labs acquisition delivers battle-tested embedded wallet infrastructure with substantial developer adoption and proven scalability. Collectively, these strategic purchases amplify Payward’s service offerings across regulated exchange operations, payment processing, custody solutions, and foundational blockchain technology.
The parties have not disclosed specific financial details regarding the Magic Labs asset transaction. The company had previously secured $52 million in venture funding with PayPal Ventures serving as lead investor, demonstrating significant institutional confidence prior to this divestiture. This restructuring enables Magic Labs to channel complete attention toward authorization layer technology while Payward consolidates its position as a comprehensive cryptocurrency services provider.
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