Kraken Acquires Backed Finance to Expand Tokenized Stocks and ETFs in 2025

• Why Did Kraken Acquire Backed Finance?
• How Do Tokenized Stocks Work on Kraken’s Platform?
• What’s the State of Crypto IPOs Amid Market Turmoil?
• How Does This Affect Kraken’s Competition?
• What’s Next for Tokenized Securities?
• FAQs

In a bold move to dominate the tokenized securities market, Kraken has acquired Backed Finance, a leading platform for tokenized stocks and ETFs. This strategic acquisition allows Kraken to enhance its offerings with Backed’s xStocks, which currently hold 23% of the tokenized securities market. The deal underscores Kraken’s long-term vision for blockchain-powered trading, even as the broader crypto IPO market faces significant losses. Here’s a deep dive into what this means for investors and the future of tokenized assets.

Why Did Kraken Acquire Backed Finance?

Kraken’s acquisition of Backed Finance is a calculated step to solidify its position in the tokenized securities space. Backed, founded in 2021, is the second-largest platform for tokenized stocks and ETFs, with 60 assets under its xStocks brand. These tokens are fully backed 1:1 by real-world securities, enabling 24/7 trading—a feature traditional markets can’t match. Arjun Sethi, Kraken’s co-CEO, emphasized the company’s focus on execution over hype: “While everyone talks about tokenized stocks, we’re just doing it.” The financial terms weren’t disclosed, but the MOVE aligns with Kraken’s $20 billion valuation and plans for a 2026 IPO.

How Do Tokenized Stocks Work on Kraken’s Platform?

Tokenized stocks and ETFs on Kraken are cryptographic representations of real securities, traded round-the-clock. For example, if you buy a tokenized Apple stock, it’s backed by an actual Apple share held in custody. This structure combines the liquidity of crypto with the stability of traditional assets. Backed’s xStocks, now integrated into Kraken, include major names like BlackRock’s $2.3 billion tokenized money market fund. Unlike traditional exchanges, Kraken allows trading even on weekends—a perk that’s attracting a new wave of investors.

What’s the State of Crypto IPOs Amid Market Turmoil?

The timing of Kraken’s acquisition is ironic, given the brutal year for crypto IPOs. Since Bitcoin’s October peak, over $1 trillion has evaporated from the crypto market, dragging down public listings. In the U.S., IPOs raising $50M+ (excluding SPACs) fell 5.3% this quarter, while the S&P 500 gained 0.9%. Crypto-related IPOs fared worse: Gemini Space Station (-14%), eToro (-20%), and Bullish (-38%) all tanked. Circle Internet Group lost half its value, though it still trades above its debut price. The silver lining? bitcoin trading volume hit a March high, giving exchanges like Kraken a short-term boost.

How Does This Affect Kraken’s Competition?

Kraken isn’t alone in betting on tokenized securities. Competitors like BTCC and Binance have also launched tokenized stock offerings this year. But Kraken’s acquisition of Backed—its fifth this year—gives it an edge in infrastructure. By absorbing Backed’s tech, Kraken can optimize its systems for scalability ahead of its 2026 IPO. Analysts at TradingView note that tokenized assets could bridge crypto and traditional finance, but regulatory hurdles remain. “This is a marathon, not a sprint,” says one BTCC strategist.

What’s Next for Tokenized Securities?

Kraken’s play signals confidence in tokenization despite market headwinds. The firm plans to expand Backed’s xStocks by integrating them into its core platform. Meanwhile, BlackRock’s success with its tokenized fund hints at institutional interest. For retail traders, the appeal lies in flexibility: no more waiting for market hours to trade Tesla or SPY. As CoinMarketCap data shows, tokenized assets still represent a niche, but Kraken’s move could accelerate adoption—assuming regulators don’t throw a wrench in the works.

FAQs

What does Kraken’s acquisition of Backed Finance mean for investors?

Investors gain access to a wider range of tokenized stocks and ETFs, tradable 24/7 on Kraken’s platform. This adds flexibility but also introduces crypto-market volatility.

Are tokenized stocks safer than traditional stocks?

They’re backed 1:1 by real securities, so the risk mirrors traditional markets. However, crypto exchanges lack the same regulatory safeguards as stock exchanges.

Why are crypto IPOs struggling in 2025?

A $1 trillion market crash and regulatory uncertainty have spooked investors. Even strong players like Circle have seen steep declines post-IPO.