Kraken Makes Bigger Bet on Tokenization With Backed Acquisition

Crypto exchange Kraken is set to acquire tokenized assets platform Backed Finance.

The deal, announced in a news release Tuesday (Dec. 2), follows a collaboration between the companies called xStocks, their tokenized equities effort. Terms of the deal were not disclosed.

“xStocks has seen exceptional adoption since its debut earlier in 2025, surpassing $10 billion in combined exchange and onchain trading volume within six months,” the release said.

“This acquisition gives Backed access to the capital and resources needed to scale faster and capitalize on surging adoption and growing institutional demand for tokenized equities.”

In an interview with Bloomberg News, Kraken co-CEO Arjun Sethi said the acquisition allows the company to integrate stocks and exchange-traded funds more deeply into its platform.

“While everyone is talking about tokenized equities, we are just doing it,” Sethi said. “We are focused on long-term investment, not hype.”

As PYMNTS wrote earlier this year tokenization has evolved from a niche concept to a “strategic imperative across financial services,” increasingly supporting payment security and the trading of real-world assets.

Benefits include security and fraud prevention, as network tokenization can mask sensitive data and cut down on fraud while boosting transaction approval rates. Asset tokenization, meanwhile, allows for instant settlement, automated compliance, and “24/7 trading and fractional ownership,” the report added.

Still, there are challenges facing tokenization, including “regulatory and legal ambiguity.” Regulators in the United States, such as the Securities and Exchange Commission (SEC), still have not formalized frameworks for tokenized securities, though some officials have indicated they are “willing to work with” different approaches, PYMNTS added.

Kraken and Backed announced in September that they were expanding xStocks to the Ethereum blockchain, saying it offered new ways to integrate tokenized stocks and ETFs “across the world’s most widely adopted smart contract network.”

Kraken announced in late June that it begun offering tokenized U.S. stocks and ETFs on its platform for eligible non-U.S. clients, with the help of xStocks.

Sethi said in the blog post that xStocks is a critical component in Kraken’s plan to bring traditional assets “onto trust-minimized infrastructure.”

Meanwhile, the company  recently announced plans to go public, filing confidentially last month for an initial public offering (IPO) with the SEC.

Also in November, Kraken launched the Krak Card, a crypto-fiat debit card on the Mastercard network, available initially in the United Kingdom and the European Union.