Traditional finance is doubling down on crypto. Deutsche Börse AG, the Frankfurt-based operator of one of Europe’s largest stock exchanges, has acquired a 1.5% stake in Payward Inc., the parent company of crypto exchange Kraken, in a deal valued at $200 million. The transaction is expected to close in the second quarter pending regulatory approval, according to Bloomberg.
The investment values Kraken at approximately $13.3 billion, a significant decrease from its $20 billion valuation during a fundraising round last November. Despite the lower valuation, the deal signals deepening confidence from traditional financial institutions in one of crypto’s largest platforms.
Deutsche Börse’s move represents a broader trend of legacy financial players seeking exposure to digital assets and blockchain infrastructure. The Frankfurt exchange joins other major institutions like Intercontinental Exchange, parent company of the New York Stock Exchange, which invested roughly $200 million in crypto exchange OKX earlier this year in a deal that valued OKX at $25 billion.
“We’re seeing a clear wave of consolidation and partnerships as traditional financial institutions move to catch up with crypto, particularly around tokenized assets,” Ruchir Gupta, co-founder of Gyld Finance, told Decrypt. “It’s hard for them to build out these businesses from scratch; therefore, they are investing in incumbents to gain an edge.”
The Deutsche Börse stake builds on a partnership announced in December that spans foreign exchange liquidity, custody, settlement, collateral management, and tokenized assets. Under that agreement, Kraken integrated directly with 360T, a Deutsche Börse subsidiary and one of the world’s largest foreign-exchange trading venues, giving Kraken clients access to bank-grade FX liquidity.
In February, the partnership reached a key milestone when xStocks launched on 360X, Deutsche Börse’s regulated trading venue. The platform enables trading of blockchain-based tokens representing real equities and ETFs, each backed 1:1 by underlying assets and held with licensed custodians.
Institutional adoption is increasingly becoming a competitive advantage in crypto. A Deutsche Börse endorsement can open doors for institutional clients who need confidence from an established traditional finance player before engaging with a firm like Kraken. “Large traditional players are under pressure to keep up with the momentum and regulatory clarity, and buying out stakes—especially in companies that are still private—is one of the easiest ways to do that,” Gupta explained.
The investment comes as Kraken pursues multiple paths to go public. Last November, the exchange confidentially filed for an initial public offering after raising $800 million at a $20 billion valuation, but the listing has since been put on hold. Meanwhile, KRAKacquisition Corp., a SPAC sponsored by a Kraken affiliate, completed a $345 million public offering in January and is currently hunting for an acquisition target valued as high as $10 billion.
KRAKacquisition’s director Ravi Tanuku previously told Decrypt that the market is paying premium valuations for firms tied to stablecoins and tokenization. “The market is clearly paying up for those and starting to realize there’s big changes afoot,” he said last month.
The Deutsche Börse partnership also highlights the growing importance of tokenized securities in bridging traditional and blockchain-based financial markets. “I see this as an important milestone for tokenized securities but also more broadly for the convergence of traditional markets and blockchain-based rails,” Gupta said.
Beyond the strategic partnership, Kraken is also contending with a recent security challenge. The exchange disclosed that a criminal group has threatened to release stolen customer data unless the company pays a ransom. Chief Security Officer Nick Percoco stated that Kraken will not negotiate with the extortionists and is working with law enforcement across jurisdictions.
According to Percoco, approximately 2,000 individuals potentially had their information viewed during the breach, with anyone at risk already contacted by the company. “We will not pay these criminals; we will not ever negotiate with bad actors,” Percoco posted on social media.
Decrypt could not independently verify the claims about the Deutsche Börse acquisition at the time of publication and has reached out to both companies for comment.
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