Kraken is reportedly in talks to buy a 15% stake in Aave, one of the biggest decentralized finance (DeFi) lending platforms in the crypto industry. If the deal goes through, it would value Aave at around $385 million.
According to reports, Kraken’s parent company, Payward, would invest 35,000 ETH in exchange for 250,000 AAVE tokens and a 15% ownership stake in Aave Group. Sources familiar with the discussions said Kraken may also sell part of the deal to other investors, with that portion valued at roughly $71 million.
Neither Kraken nor Aave has officially confirmed the talks. Kraken declined to comment, while Aave did not respond to requests for comment.
The potential investment would be an important step in Payward’s growing focus on decentralized finance. Sources say the deal could be the first of many investments made through Payward Asset Management, a new business unit that plans to invest in DeFi projects and other digital asset opportunities.
Aave is currently the largest decentralized lending protocol in the crypto market. It allows users to lend and borrow digital assets without relying on banks or traditional financial institutions. Lenders earn returns by supplying assets to liquidity pools, while borrowers use crypto as collateral to secure loans.
Earlier this year, Aave faced a major challenge when attackers linked to North Korea’s Lazarus Group exploited KelpDAO’s cross-chain bridge and created around $292 million worth of unbacked rsETH tokens. The attackers then used those tokens as collateral on Aave and borrowed real assets against them.
Although Aave’s own smart contracts were not hacked, the incident left the protocol with an estimated $190 million to $230 million in bad debt after the fake collateral lost its value. The event also triggered panic among users, who withdrew more than $8 billion from the platform.
The reported Aave investment comes as Kraken continues to expand beyond its core crypto trading business.
In April, Payward agreed to acquire crypto derivatives platform Bitnomial in a deal worth up to $550 million. The acquisition gives Kraken access to important U.S. regulatory licenses, helping the company build a stronger and more complete derivatives business.
Kraken has also been growing its presence in tokenized securities. In June, the company launched a tokenized IPO program that allows users to register interest in upcoming U.S. stock market listings. Eligible participants can receive tokenized shares backed one-to-one by real stocks at the IPO price when trading begins.
The company also revealed that its xStocks network processed more than $30 billion in transaction volume during its first year. More than $6 billion of that activity was settled on-chain, and the network now serves over 125,000 holders worldwide.
If completed, the Aave deal would further strengthen Kraken’s position in the fast-growing DeFi sector and show its ambition to become much more than just a cryptocurrency exchange.
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