Kraken Parent Payward Reports 12% Revenue Decline, Bets on Diversification

Payward, the Wyoming-based parent company of crypto exchange Kraken, reported a 12% year-over-year decline in its preferred revenue metric for the third quarter, as subdued trading activity cut into fee income. Total platform margin fell to $487 million for the quarter, according to a blog post the company shared with CoinDesk.

The figure matters beyond Payward's own books. The metric, which replaces the company's previous adjusted revenue measure, deducts staking rewards paid to clients alongside trading costs — a more conservative read on what the business actually earns from each dollar of client activity.

How deep does the industry slowdown run?

Payward is not an outlier. Coinbase Global (COIN) posted a 35% year-over-year revenue decline for the third quarter, while Gemini Space Station (GEMI) reported a 19% revenue drop and a 73% slump in trading volumes. Across the sector, the arithmetic is blunt: fewer trades mean less fee income, and exchanges that remain dependent on trading commissions absorb the shock directly.

The figures underscore a structural pressure that practitioners have watched build for several quarters — the need to develop income streams beyond trading fees before the next volume trough arrives.

What does Payward's diversification actually change?

For Payward, the shift is measurable. Income tied to client assets and access to products, data and services rose to 52% of the total, up from 46% a year earlier. In practical terms, more than half of the company's earnings base no longer depends on how much clients trade.

The company now operates four established business lines:

• trading;
• banking;
• asset management;
• Payward Services, which supplies financial infrastructure to other companies.

It has also added artificial intelligence as a fifth pillar, with plans for a personal finance agent and investment funds built on its xStocks tokenized equities platform. The strategy extends Payward's reach into traditional futures, equities, payments, custody and lending.

The asset management arm spans digital assets, structured yield and tokenized investments. In November, a Payward-affiliated fund and its clients purchased an undisclosed amount of AAVE tokens through secondary-market transactions, as the company and decentralized lender Aave explored opportunities for further collaboration — a signal that the asset-management push extends into DeFi-native instruments, not only wrapped traditional products.

Bank partnerships move the strategy forward

Payward has also been pursuing partnerships with major banks. The company has held talks with Wells Fargo about supplying liquidity for crypto trading, CoinDesk previously reported, citing people familiar with the discussions. Separately, it discussed a financial-infrastructure partnership with BNY that could span digital assets, custody, wealth management, trading and payments.

For competitors, the implications are direct. A diversified exchange that can offer banks regulated infrastructure, custody and liquidity is competing for a different client base than a pure retail trading venue — and doing so with a revenue base that is already majority non-trading.

Is the trough already behind?

There are early signs of a rebound. Total platform margin gained 12% compared with the second quarter, the company said. Adjusted earnings also rose during the quarter, driven by recovering trading activity and growth in income from client assets and access to services, though they remain well below the year-earlier figure.

Whether the quarter-on-quarter recovery holds will depend on sustained volume levels. But the composition of Payward's revenue has already changed: a business that once lived and died by trading fees now draws the majority of its margin from client assets and services, and the Wells Fargo and BNY discussions suggest the next leg of growth may come from the banks themselves.