Kraken Acquires Backed Finance to Expand RWA Tokenization of Wall Street Equities

Kraken's Strategic Acquisition of Backed Finance Accelerates Real-World Asset Tokenization for Crypto Investors

In a significant move that underscores the accelerating convergence of traditional finance and digital assets, leading cryptocurrency exchange Kraken has announced its acquisition of real-world asset (RWA) tokenization firm Backed Finance. This strategic acquisition, finalized in early December 2025, is centered on Backed's flagship product, xStocks—a platform for tokenized equities that has rapidly gained traction since its launch. The deal represents a foundational step in Kraken's broader strategy to dominate the burgeoning RWA tokenization sector, particularly for Wall Street equities, and comes at a pivotal moment as the exchange prepares for a landmark initial public offering (IPO).

The acquisition follows a prior strategic partnership between the two firms and will see Backed Finance absorbed into Kraken FX. While financial terms remain undisclosed, the transaction's impetus is clear: to fully integrate and scale Backed's proven xStocks product across Kraken's global ecosystem. This move capitalizes on impressive early metrics from Backed, which reported over 84,000 holders of its xStocks tokens, $12 billion in total trading volume, daily transactions surpassing $30 million, and assets under management reaching $175 million—all achieved since the product's launch on June 30, 2025. For Kraken, this acquisition is more than an expansion; it is, as co-CEO Arjun Sethi stated, "foundational work for the next era of market structure," aimed at redefining asset ownership in the digital age.

The xStocks Product: Bridging Wall Street and Crypto

At the heart of this acquisition is Backed Finance's xStocks product. This platform creates digital tokens that are fully backed by real-world equities from major corporations like Apple, Nvidia, and Tesla. Each token represents a direct claim on the underlying stock, held in custody by a licensed fiduciary, allowing users to gain exposure to traditional equity performance through a blockchain-based digital asset. This model provides several key benefits familiar to crypto natives: 24/7 trading potential, fractional ownership enabling access to high-value stocks with smaller capital outlays, and the operational efficiency and transparency inherent to blockchain settlement.

The rapid adoption metrics—84,000 holders and $175 million in assets under management in just over five months—demonstrate a clear market demand for such a product. The $12 billion in total volume indicates not just initial interest but sustained, high-liquidity trading activity. This success likely presented a compelling case for Kraken to move from partnership to outright ownership, ensuring control over the product's roadmap and deeper integration with its core exchange infrastructure.

Kraken's Strategic Positioning: Beyond a Crypto Exchange

Kraken's acquisition must be viewed within the context of its recent corporate and financial milestones. The exchange reported $648 million in revenue for the third quarter of 2025, marking a 50% increase over the previous quarter. Furthermore, Kraken successfully raised $800 million in a funding round at a $20 billion valuation ahead of its planned IPO. In November 2025, as reported by Coinspeaker, Kraken submitted a draft registration statement on Form S-1 with the U.S. Securities and Exchange Commission (SEC), formally initiating its journey to become a publicly traded company.

This financial strength and public-market ambition provide crucial context for the Backed deal. Acquiring a compliant, fast-growing RWA platform diversifies Kraken's revenue streams beyond volatile cryptocurrency trading fees. It positions the exchange as a comprehensive gateway for digital asset investors seeking exposure to both crypto-native assets and tokenized versions of the world's largest traditional companies. The move aligns with a broader industry trend where major crypto exchanges are expanding their offerings to include stocks, commodities, and other RWAs to become all-encompassing financial platforms.

The Expanding Landscape of Real-World Asset Tokenization

Kraken is not operating in a vacuum. The RWA tokenization sector has seen increased activity from both traditional financial institutions and crypto-native companies. For comparison, other projects in this space have taken varying approaches. Some focus on tokenizing government bonds or private credit, while others, like Backed's xStocks, target publicly traded equities. The scale of Backed's early growth—$12 billion in volume and $175 million AUM in its first months—places it among the more successful initial launches in this niche.

The role of such platforms is becoming increasingly significant. They act as critical infrastructure for the "onboarding" of traditional capital into blockchain-based systems. By offering a familiar asset class (blue-chip stocks) in a new technological wrapper, they lower the entry barrier for institutional and retail investors who understand equity investing but may be newer to digital assets. For crypto-native users, these products offer a way to deploy capital within the same wallet and exchange ecosystem without needing to use traditional brokerage accounts.

Regulatory Considerations and Path Forward

A pivotal aspect of Backed's model, and now Kraken's offering, is its compliance structure. The tokens are fully backed by the actual equities held with licensed custodians. This structure is designed to navigate complex securities regulations by ensuring each digital token is directly tied to a real security. As Kraken integrates xStocks and pursues global adoption, navigating differing regulatory regimes across jurisdictions will be paramount. The timing of this acquisition ahead of Kraken's IPO suggests confidence that this RWA model aligns with regulatory expectations and can scale within existing frameworks.

Kraken's stated post-acquisition plan is to "fully integrat[e] xStocks throughout its service stack and accelerat[e] global adoption." This implies technical integration for seamless trading and custody alongside aggressive marketing and licensing efforts to bring the product to new markets. The success of this integration will be a key metric for observers.

Conclusion: A Foundational Shift in Digital Asset Markets

Kraken's acquisition of Backed Finance is more than a simple business expansion; it is a strategic bet on the future structure of financial markets. By bringing tokenized Wall Street equities directly onto one of the world's largest crypto exchanges, Kraken is blurring the lines between asset classes and building a unified platform for digital value. The impressive early traction of the xStocks product validates demand for such services.

For readers and market participants, this development signals several important trends to watch. First, monitor how deeply Kraken integrates xStocks—will it become a native trading pair for major cryptocurrencies? Second, observe the competitive response from other major exchanges as they seek their own RWA strategies. Third, pay close attention to regulatory statements or guidance concerning these tokenized equity products as they gain scale.

Ultimately, this move underscores that the future of finance is not purely digital or traditional but an integrated system where blockchain technology unlocks new efficiencies and access for all asset types. Kraken's acquisition positions it at the forefront of this convergence as it simultaneously marches toward its own milestone as a publicly listed company on a traditional stock exchange—a full-circle moment for a pioneer in the digital asset space.

Disclaimer: This article is based on publicly available information and press releases from Kraken and Backed Finance dated December 2025. It is intended for informational purposes only and should not be construed as financial or investment advice.