Deutsche Börse Takes $200 Million Stake in Crypto Exchange Kraken

Deutsche Börse AG invested $200 million in Payward Inc., the parent of crypto trading platform Kraken, as the Frankfurt stock exchange operator moves to offer access to a wider array of securities over blockchain rails.

The deal, which gives Deutsche Börse a 1.5% fully diluted stake in the company, is expected to close in the second quarter subject to regulatory approval, according to a statement on Tuesday.

The transaction values Kraken -- which plans to go public as soon as this year -- at around $13.3 billion, according to Bloomberg calculations. It was valued at $20 billion in a November share sale.

Deutsche Börse's investment follows a partnership between the two companies announced in December and comes as traditional financial firms increase their exposure to digital assets. New York Stock Exchange owner Intercontinenal Exchange Inc. invested about $200 million in crypto exchange OKX earlier this year.

"It's a perfect partner for us to further accelerate on this path of creating a fully hybrid market infrastructure," Thomas Book, a member of Deutsche Börse's management board, said in an interview. "Irrespective of what is now the form of an asset -- whether it's tokenized or fully digital -- we want to create one integrated value chain."

Kraken, one of the world's oldest crypto exchanges, filed confidentially for a US initial public offeringBloomberg Terminal in November. That same month, the company announced that it had raised $800 million in a funding round that valued it at $20 billion.

Both companies declined to comment on the valuation in the Deutsche Börse deal.

Crypto Going Mainstream

The digital asset industry's integration into traditional finance has accelerated under US President Donald Trump and as a result of more regulatory clarity in the European Union. Kraken became the first crypto firm to gain access to the Federal Reserve's core payments system in March. It launched MiFID-regulated crypto derivatives in the EU last year.

Deutsche Börse's Clearstream unit in November said it introduced a platform for trading tokenized securities. The following month the bourse operator announced the partnership with Kraken, in which the crypto exchange will be integrated with Deutsche Börse's foreign-exchange trading venue 360T.

"The progress since then has been encouraging, and today's announcement is a further reflection of the trust that has developed on both sides," a Kraken spokesperson said in a statement on Tuesday.

The crypto market has been facing headwinds for months, with Bitcoin down about 40% since reaching a record in October. That's hurt digital-asset exchanges such as Kraken rival Gemini Space Station Inc., which is said to be seeking hundreds of millions of dollars in loans from its founders after cutting jobs and exiting some markets this year.

Even as crypto moves into the financial mainstream, digital-asset platforms have been vulnerable to cyberattacks. Kraken disclosed an extortion attempt on Monday, saying it's being targeted by a criminal group that claims to have access to some client account information. Client funds were never at risk, according to a senior Kraken executive.