Payward to acquire Magic Labs wallet unit for B2B stack

Payward, the company behind cryptocurrency exchange Kraken, plans to acquire the wallet-as-a-service business of Magic Labs. The deal would fold embedded, non-custodial wallet technology into Payward Services, the firm's B2B infrastructure platform, giving partners a single integration point for exchange, custody, and now wallet functionality.

Magic Labs' infrastructure currently powers more than 60 million wallets and has processed over $10 billion in stablecoin volume for 200,000 developers. The transaction is expected to close within weeks, subject to customary conditions.

What Payward gains from the deal

Payward Services already offers partners infrastructure for cryptocurrency trading, custody, tokenized assets, on-and-off ramps, and derivatives. The missing piece: embedded wallets. Without them, partners building on-chain products had to stitch together multiple vendors for self-custody and wallet experiences.

"Embedded wallets are becoming foundational infrastructure for every on-chain product," said Mark Greenberg, Payward's Chief Commercial Officer. "Magic Labs' technology lets us bring that layer in-house and offer partners a complete, integrated stack—exchange, custody and now wallet—without stitching together multiple providers."

The acquisition follows Payward's purchase of payments infrastructure firm Reap, which closed on July 1, 2026. That deal, announced in May, aimed to open a path to regulated infrastructure for stablecoin payments and card issuance. Together, the two acquisitions signal Payward's intent to own more of the B2B crypto stack rather than rely on third-party integrations.

Magic Labs becomes Newton Labs

Magic Labs is rebranding as Newton Labs and narrowing its focus. Sean Li, the company's CEO, said the wallet sale lets the team concentrate entirely on Newton Protocol, which Li describes as "the authorization layer for on-chain finance."

"This transition allows us to put our full energy behind Newton, the authorization layer for on-chain finance, while the wallet business moves to a team committed to serving our customers," Li said. VaultKit and all Newton Protocol development will remain with Newton Labs.

Existing Magic Labs wallet customers will be serviced by Payward starting August 1, 2026. Li stated that services and integrations will continue without interruption.

Why embedded wallets matter for B2B

Non-custodial wallets let users control their own private keys while still benefiting from a managed interface. For B2B platforms, offering this capability means partners can ship on-chain products without building wallet infrastructure from scratch or forcing users into third-party apps.

The market for wallet-as-a-service has grown as more traditional financial firms explore tokenized assets and stablecoin payments. A company offering exchange, custody, fiat rails, and now wallets through a single API has a clear pitch: reduce vendor sprawl.

What this means for existing customers

Li's LinkedIn post emphasized continuity. Wallet customers transition to Payward on August 1, and integrations should keep working. Still, any acquisition carries migration risk. Developers relying on Magic Labs' APIs will want to watch for deprecation timelines, pricing changes, or shifts in SLA terms once Payward formally takes over.

For Newton Labs, the divestiture is a focus play. Running a wallet business and building an authorization protocol are two different operational modes. By selling the wallet unit, Li bets the smaller company can move faster on Newton without the support burden of 200,000 developers.

Source: PYMNTS | / PYMNTS