Deutsche Boerse acquires Kraken’s stake in a $200 million deal

Deutsche Börse AG makes a $200 million bet on cryptocurrency exchange Kraken It could change how traditional financial institutions place claims on digital assets, according to one expert.

The Frankfurt exchange operator has acquired a fully diluted 1.5% stake in Payward Inc., Kraken’s parent company, in a deal expected to close in the second quarter pending regulatory approval, according to Bloomberg a report.

Decryption He was unable to verify the claims at press time and has reached out to both companies for comment.

The deal values ​​Kraken at about $13.3 billion, down from its $20 billion valuation during its November fundraising round, according to Bloomberg the accounts.

“We are seeing a clear wave of mergers and partnerships as traditional financial institutions move to catch up with cryptocurrencies, especially with respect to tokenized assets,” said Ruchir Gupta, co-founder of Gyld Finance. Decryption.

“It is difficult for them to build these companies from scratch, so they invest in existing companies to gain an advantage,” he added.

The move of the German Stock Exchange comes in the wake of the move of the Intercontinental Stock Exchange, the parent company of the New York Stock Exchange, which Invested nearly $200 million on cryptocurrency exchange OKX earlier this year in a deal that valued OKX at $25 billion.

“Big traditional companies are under pressure to keep up with momentum and regulatory clarity, and buying stakes — especially in companies that remain private — is one of the easiest ways to do that,” Gupta said. Decryption.

“I see this as an important milestone for tokenized securities but also more broadly for the convergence of traditional markets and blockchain-based mints,” he said, adding that the Deutsche Boerse’s endorsement opens doors for institutional clients who need that vote of confidence before engaging with a company like Kraken.

Partnership

The investment is based on the partnership between the two companies Announce in December, which includes FX liquidity, custody, settlement, collateral management, and token assets.

Under this agreement, Kraken is directly integrated with 360T, a subsidiary of Deutsche Börse and one of the world’s largest forex trading venues, giving Kraken clients access to bank-level forex liquidity.

In February, the partnership reached its first milestone xStocks was launched on 360XDeutsche Börse’s regulated trading venue, allowing… blockchainStock-based tokens representing real stocks and ETFs, each backed by a 1:1 ratio of the underlying assets and held with licensed custodians.

Public market payment

Last November, Kraken secretly Submitted for public subscription After raising $800 million at a $20 billion valuation, but the listing has since been suspended, according to the company CoinDesk a report.

Meanwhile, KRAKacquisition Corp., a SPAC sponsored by a Kraken affiliate, completed a $345 million public offering in January and is looking for an acquisition target worth up to $10 billion.

“Clearly the market is paying for these things and is starting to realize that big changes are afoot,” said Ravi Tanuku, director of KRAKacquisition. He said Decryption Last month, in a sign of investor appetite for related companies stablecoins and Coding.

Threat of blackmail

Kraken also competes with the latest Blackmail attempt As the attackers claimed to have access to some customer data, chief security officer Nick Percoco stated that the company would not do business with them and was working with law enforcement authorities across jurisdictions.

Information about about 2,000 individuals is likely to be viewed, with anyone at risk already contacted, Percoco said.