In a strategic move aimed at enhancing its offerings, the cryptocurrency exchange Kraken has acquired the token management platform Magna, according to an announcement made on Wednesday. The terms of the acquisition, which was finalized on Friday, remain undisclosed, marking Kraken’s sixth acquisition in the past year. This follows their notable $1.5 billion acquisition of U.S. futures platform NinjaTrader in March.
Magna specializes in assisting cryptocurrency firms with the management of token distributions, a critical service particularly for startups that secure funding from venture capitalists. These startups often promise investors a certain allocation of tokens, akin to how traditional companies offer shares. As the distribution lists expand, managing and keeping track of token ownership can become complex, especially once tokens become publicly tradeable. This complexity is where Magna’s services become invaluable, as explained by Arjun Sethi, co-CEO of Kraken, in an interview with Fortune.
Sethi emphasized that acquiring Magna will enable Kraken to engage and support token issuers from the early stages rather than waiting until they seek liquidity for their tokens. This proactive approach aligns with Kraken’s strategy to bolster its operational capabilities in the evolving cryptocurrency market.
This latest acquisition is part of Kraken’s broader initiative to expand its product suite in anticipation of a public listing. With an eye on the future, Kraken joins a cohort of cryptocurrency firms like BitGo, Gemini, Circle, and Bullish, all of which are positioning themselves for initial public offerings (IPOs) by 2025.
Last November, Kraken filed for an IPO confidentially, and earlier in February, it disclosed some of its financial outlook for 2025, similar to reports issued by publicly traded companies. However, Sethi refrained from providing a specific timeline for the company’s market entry, citing the typical constraints imposed during a regulatory “quiet period” that restricts public communications from executives.
Furthermore, Kraken’s acquisition of Magna coincides with a broader trend among cryptocurrency exchanges looking to diversify their service offerings beyond traditional cryptocurrency trading. Competitors like Coinbase have expressed ambitions to evolve into “everything exchanges,” broadening their range of available financial products. Earlier this year, Coinbase made headlines by purchasing Liquifi, another token management platform, although Sethi clarified that Kraken did not pursue a bid for Liquifi, reiterating that their focus on market structure and lifecycle remains paramount.
Magna, a graduate of the 2022 winter cohort from the Y Combinator accelerator, was last valued at $70 million in its recent funding round, based on PitchBook data. The platform joins a growing list of companies that Kraken has acquired in recent months, including the tokenized stock provider Backed and the derivatives infrastructure firm Small Exchange, further solidifying Kraken’s presence in the competitive cryptocurrency landscape.
