Kraken Parent Payward Sees Revenue Rise Amid Profit Decline

Payward, the parent company of crypto exchange Kraken, reported a significant drop in adjusted pretax earnings for the second quarter. Despite a 17% increase in revenue to $508 million, the company's adjusted profit fell by 71% to $23 million. This decline reflects a shift away from trading fees and towards asset-based and other revenue streams.

Funded accounts grew by 42% to a record 6.6 million, while platform assets reached $40 billion. The decrease in transaction volume was offset by the growth of non-transaction businesses, which accounted for 60% of total revenue. This trend is seen as a positive sign for Payward's diversification strategy.

The company has continued to make acquisitions, including the purchase of Bitnomial, Reap, and Magic Labs' wallet infrastructure business. These deals aim to expand Payward's offerings beyond spot crypto trading and position it in direct competition with exchanges and fintech companies.