Crypto downturn hits Kraken twice, as exchange and as lender

Kraken’s parent company, Payward, earned much less in the third quarter because fewer people traded crypto, according to the company’s financial results for the third quarter of 2026. 

The falling price of bitcoin is also hurting Payward’s loans. The company has not listed its shares on the stock market yet, and it is trying to prove it can earn through a down cycle. 

Why is Payward earning less?

Kraken’s parent company, Payward, makes most of its money from fees when people buy and sell crypto. It also lends money to other crypto companies. However, falling crypto prices are hurting both parts of its business. 

With less people trading due to price drops, Payward is collecting fewer fees. The bitcoin that borrowers put up as security for their loans has also lost value, which makes those loans riskier.

The company’s third-quarter numbers already show the drop in fees. According to a letter sent to shareholders, Payward’s adjusted EBITDA was $60 million, down 67% from a year earlier. The total value of trades on the platform fell 30% to $353 billion. Its platform margin, which it now reports instead of adjusted revenue, fell 12% to $487 million.

However, the number of accounts holding any money rose by 37% to 7.1 million. The quarter was also better than the one before it. Adjusted EBITDA rose 163% from the second quarter. 

Bitcoin rose about 40% between mid-August and early October, then gave back those gains as people worried about inflation and the U.S. midterm elections.

What did Kraken do about its loan to Nakamoto?

Kraken gave one of its borrowers, Nakamoto Inc. (NASDAQ: NAKA), more time to pay. The borrower is a bitcoin company based in Nashville. A filing with the U.S. Securities and Exchange Commission shows that both companies decided to change the terms of their loan agreement on November 11.

Nakamoto still owes 165 million USDT from a loan it took from Kraken in June, but following the change, it now has until December 4, 2027, to repay 60 million USDT of that. The old deadline was December 4, 2026. The remaining 105 million USDT is still due on the initial deadline of June 30, 2027. 

Nakamoto’s bitcoin trading positions at Kraken can now count towards its loan. The filing says this is meant to help protect the company if bitcoin’s price falls, so it has more time before it must add security or repay part of the loan. 

This is not the first time Nakamoto has needed help. In June, it reportedly sold about $48 million in bitcoin and related investments to cut its debt. In the same month, Kraken teamed up with Maple Finance to fund its loans without using its own money.

Payward also wants to depend less on trading fees. In October, it agreed to buy Saldo Bank, a bank licensed in Lithuania, to get a European banking license. It also plans to offer tokenized stocks, prediction markets, perpetual futures if U.S. regulators allow it, and its own token. 

In September, the venture arm of Nasdaq (NASDAQ: NDAQ) agreed to invest $100 million in Payward. The deal values the company at $21 billion. Payward’s plan to list its shares may also take longer than expected. Bloomberg has reported that it might not happen before next year.

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