Magic Labs has sold its embedded wallet business to Payward, the parent company of Kraken, signaling a shift in its strategic direction. Announced on Monday via a post by co-founder and CEO Sean Li on X, the sale includes all wallet-related assets and services, which will officially transition to Payward starting August 1, 2026. Current users of the wallet service are not required to take any action, and relevant partners are being notified directly. Financial details of the deal were not disclosed.
Since launching its invisible web2-style login wallet back in 2018, Magic Labs' technology has powered over 60 million wallets and supported more than 200,000 developers. Its embedded wallet has been a key backbone for projects such as Polymarket and WalletConnect.
Pivot to Onchain Authorization with Newton Protocol
Following the sale, Magic Labs is rebranding as Newton Labs to focus on its Newton Protocol, an authorization layer that vets onchain transactions against policy rules before final settlement. This new focus aims to address compliance and risk controls that smart contracts alone cannot enforce.
The Newton Protocol is already live in production with VaultKit, a tool designed to bring compliance and security controls to DeFi vaults. Collaborators on this include Redstone, Webacy, and VaultsFYI. Dennis Won, who spearheaded engineering efforts for Newton, has been named co-founder and CTO under the new branding.
Sean Li described the shift as a natural progression: "Onboarding the world was part one of the adoption mission. Securing the capital that follows is part two." The mainnet beta of Newton Protocol is currently active.
This acquisition adds to Payward's recent expansion spree, which also includes its deals for the Hong Kong payment firm Reap and the U.S. derivatives exchange Bitnomial.
This information is provided for informational purposes and is not financial advice.
