Kraken eyes 15% stake in DeFi lender Aave in deal valuing protocol at $385 million

Aave is the largest decentralized lending protocol, allowing users to lend and borrow crypto assets without intermediaries. Depositors earn yield by supplying tokens to liquidity pools, while borrowers post crypto collateral to take out loans, with smart contracts automatically managing the process.

The protocol was thrust into the center of one of DeFi’s biggest crises in April after attackers tied to North Korea’s Lazarus Group exploited KelpDAO’s cross-chain bridge to mint roughly $292 million of unbacked rsETH.

The hackers deposited the tokens as collateral on Aave and borrowed real assets against them, leaving the protocol with an estimated $190 million to $230 million in bad debt when the collateral became worthless.

Although Aave’s own smart contracts were never compromised, the exploit triggered more than $8 billion in withdrawals as users rushed to reduce their exposure, highlighting the contagion risks of DeFi’s interconnected ecosystem.

Kraken has stepped up acquisitions as parent company Payward prepares for a potential public listing, targeting businesses that expand its regulated trading infrastructure.

In April, Payward agreed to acquire crypto derivatives exchange Bitnomial for up to $550 million, adding a full suite of U.S. CFTC licenses covering brokerage, clearing and exchange operations. The deal follows Kraken’s broader push beyond spot crypto trading as it builds a multi-asset platform ahead of a widely anticipated IPO.