According to the latest quarterly results reported by Bloomberg on August 14, Payward, the parent company of crypto exchange Kraken, posted $508 million in adjusted revenue for Q2, representing a 17% year-over-year increase despite challenging market conditions. However, the company's adjusted EBITDA plunged sharply to $23 million from $80 million reported for Q2 2025, highlighting the significant impact of declining crypto market activity. The profitability decline was substantial, with Kraken reporting $80 million of adjusted EBITDA on $432 million of adjusted revenue in Q2 2025. The weak performance was attributed to falling digital-asset prices and a broader decline in market trading activity, with Bitcoin down about 50% from the record high it reached in October last year. On the operating side, total platform transaction volume reached $310 billion, down 18% from the previous year, reflecting the turbulent market conditions during the period. Despite the profit decline, the company remained adjusted EBITDA positive, demonstrating operational resilience even as crypto spot volumes declined across the industry.
The company demonstrated robust user engagement with funded accounts reaching a record 6.6 million, up 42% year over year, representing the highest level in Payward's history. However, comparisons with Kraken's previously published 4.4 million funded accounts for Q2 2025 require caution due to changes in reporting methodology. The newer Payward definition counts distinct funded accounts across its platforms and products and counts sub-accounts separately, while Kraken's 2025 disclosure described funded accounts as funded customers with balances above zero. Measured at constant asset prices, client balances grew 48% year over year to $65 billion, aligning with the shift in Payward's revenue mix. Asset-based and other revenue, tied to client balances rather than individual trades, rose to 60% of total revenue from 55% a year earlier, representing a strategic transformation away from traditional trading fees toward higher-margin asset management and platform services. This growth in accounts and balances supports the company's revenue diversification strategy as it builds a comprehensive financial infrastructure platform.
According to The Block reported on August 18, Kraken has launched trading in more than 7,000 U.S.-listed stocks for eligible customers across the European Economic Area, placing traditional shares alongside more than 700 tokenized xStocks and over 600 crypto assets in the same account. The service is provided through Payward Europe Digital Solutions (CY) Limited, a Cyprus investment firm authorized under the European Union's Markets in Financial Instruments Directive II (MiFID II). Stock trades carry no trading commission, subject to applicable terms, and eligibility is not automatic for existing customers who must accept additional terms and conditions. The launch takes Kraken's traditional equities business outside the United States, where the exchange first entered stock trading in 2025, while giving European customers two ways to gain exposure to U.S.-listed companies through the same platform. As reported by The Block, xStocks have processed more than $38 billion in total transaction volume since launching in June 2025, demonstrating strong user engagement with the tokenized equity products.
According to The Block, Kraken has continued expanding xStocks functionality since their introduction in June 2025, with the products now accounting for about 15% of the real-world asset market, around three times their share at the start of 2026. The segment has reached roughly $2.8 billion in total market capitalization, with Ondo Finance, Binance's bStocks, and Kraken's xStocks accounting for a combined 77% of the tokenized equities market. In July, Kraken allowed eligible users to post selected xStocks as collateral for futures and margin positions on Kraken Pro, with ten assets initially qualifying, including tokenized versions of Apple, Nvidia, Tesla, and major ETFs. The company also extended shareholder voting rights to more than 125,000 xStocks holders in August, allowing eligible investors to instruct the underlying custodian on how votes should be cast at company shareholder meetings. Payward has also partnered with GTN to add equities from markets outside the United States, planning to begin with Hong Kong-listed shares before adding securities from the United Kingdom, Europe, South Korea and other markets.
The company's performance came against a challenging industry backdrop, with crypto spot trading volume falling 27.9% industry-wide in the second quarter, as reported by Finance Magnates. Payward experienced a 13% year-over-year decline in total platform transaction volume to $310 billion, with the mix shifting toward equities and tokenized equities. As reported by Bloomberg, Payward's co-CEO Arjun Sethi noted that futures, equities and tokenized-stock trading grew even as spot trading volume declined across the industry. The company notably gained spot market share for a third consecutive quarter, highlighting its competitive positioning in the evolving crypto trading landscape and demonstrating its ability to maintain market share despite the broader industry trend of declining spot trading volumes. Futures daily average revenue trades increased 8% during the quarter, showing resilience in regulated derivatives products.
As reported by Payward, the company continued its aggressive acquisition strategy during and after the quarter. The company closed its purchase of derivatives venue Bitnomial on May 1, adding a CFTC-regulated designated contract market, clearing organization and futures commission merchant to its U.S. derivatives stack. This follows the company's previous acquisitions including $1.5 billion for futures broker NinjaTrader in March 2025, and the agreed acquisition of derivatives platform Bitnomial for up to $550 million in April. Additional deals included backing Token manager Magna in January, Magic Labs' wallet arm in February, and the agreed acquisition of Magic Labs' wallet infrastructure business later in the month. Co-CEO Arjun Sethi stated that the company "leaned in" because "our conviction hasn't wavered," believing these investments will define their competitive position for years to come. The company's federal banking push remains unresolved with the OCC still listing Payward National Trust Company's May 8 charter application among pending digital-asset licensing applications.
