Kraken parent Payward says expansion outside crypto trading helps cushion revenue decline

The Wyoming-based company disclosed that its total platform margin, which replaces adjusted revenue and deducts staking rewards and trading costs, declined despite showing signs of recovery with a 12% increase from the second quarter. Adjusted earnings also improved as trading activity picked up and income from client assets grew.

Diversification Strategy

Payward has been expanding into broader financial services, including trading, banking, asset management, and infrastructure services provided through Payward Services. This diversification helped lift non-trading income to 52% of total revenue, up from 46% a year earlier.

The company recently added artificial intelligence as a fifth business pillar, outlining plans for a personal finance agent and investment funds built on its xStocks tokenized equities platform. This extends its reach into traditional futures, equities, payments, custody and lending.

Strategic Partnerships

Payward has been pursuing partnerships with major financial institutions. The company held talks with Wells Fargo about supplying liquidity for crypto trading and separately discussed a financial-infrastructure partnership with BNY that could span digital assets, custody, wealth management, trading and payments.

In November, a Payward-affiliated fund and its clients purchased an undisclosed amount of AAVE tokens through secondary-market purchases as the company and decentralized lender Aave explored opportunities for further collaboration. The asset management push includes digital assets, structured yield and tokenized investments.

Industry Challenges

Payward is not alone in facing pressure from low trading volumes. Coinbase Global's third-quarter revenue fell 35% year-over-year, while Gemini Space Station reported a 19% revenue decline and a 73% slump in volumes. These figures underscore the broader industry challenge to develop income beyond trading fees as market activity weakens.