Why Did Arjun Shake Hands with Stephan?
Kraken’s co-CEO accepts a 33% haircut from Deutsche Borse — and gets the one piece of the tokenization stack he could not build or buy on his own.
Editor’s Note: A 33% down round typically is the sign of a startup in stress. Arjun Sethi just accepted one with a smile, because the buyer on the other side was Stephan Leithner of Deutsche Borse — and the check comes bundled with distribution
Deutsche Borse Group put $200 million into Payward, the parent company behind crypto exchange Kraken, acquiring a 1.5% fully diluted stake in a secondary transaction. The deal closed the same day Arjun Sethi, Kraken’s co-CEO, confirmed at the Semafor summit that the firm has confidentially filed for a U.S. IPO — a revival of plans the company publicly paused just four weeks earlier amid the crypto winter that sent bitcoin 40% below its October peak.
Kraken and Deutsche Borse were not available for comment beyond their prepared statements. The transaction is expected to close in Q2 2026, pending regulatory approval.
The $13.3 billion implied valuation is a haircut. Kraken carried a $20 billion price tag in a November share sale that raised $800 million from the biggest names in TradFi market-making: Ken Griffin‘s Citadel Securities alone wrote a $200 million check, matched by participation from Jane Street, DRW Venture Capital, HSG, Oppenheimer Alternative Investment Management, Tribe Capital, and Sethi’s family office.
Kraken filed confidentially for an IPO the very next day. The firm posted $1.5 billion in revenue in 2024 and, by its own disclosure, had already eclipsed that total in the first three quarters of 2025. The valuation still dropped roughly a third in five months.
That gave Leithner a dip to buy.
But the money is secondary to the plumbing. The two firms announced a strategic partnership last December that maps out the real prize: making Eurex-listed derivatives tradeable on Kraken, and distributing securities held in custody at Clearstream in tokenized form to Kraken’s clients. Deutsche Borse plans to connect its 360X digital asset venue and Clearstream infrastructure directly with Kraken’s xStocks platform — the tokenized equities business issued by Kraken’s Backed subsidiary that now lists 100 U.S. stocks and ETFs, targets 500 by year-end, and has processed more than $25 billion in total volume with $4 billion settled on-chain and 85,000-plus unique holders since launching in June 2025.
In the first phase, Kraken integrates with 360T, Deutsche Borse’s foreign exchange venue. Together they will build white-label solutions for banks and fintechs to offer crypto trading and custody across Europe and the U.S. The longer play: Clearstream’s custody pool — roughly $20 trillion in assets — gets a tokenized distribution channel to Kraken’s base in 110 countries.
Meanwhile, 360X and Clearstream are already working with Nathan Allman‘s Ondo Finance to list tokenized versions of Apple, Amazon, Nvidia, Tesla, Meta, Google, Microsoft, and SPY and QQQ ETFs on the 360X venue — the largest bulk listing on the platform to date, issued on Ethereum, Solana, and BNB Chain. Ondo’s assets will eventually flow into Clearstream’s custody, settlement, and collateral infrastructure. Leithner is building an assembly line.
Nasdaq Got There First
Leithner is buying a pipe that someone else already built. On March 9, Nasdaq and Payward and Backed announced their own partnership — an “equities transformation gateway” that will let tokenized shares move between Nasdaq’s regulated order books and the xStocks ecosystem on public blockchains, while preserving issuer rights and regulatory safeguards. Nasdaq expects the system to be operational in the first half of 2027.
The design principle, according to Nasdaq president Tal Cohen, is issuer-first:
“Most of tokenization has happened without the issuers in mind. Our effort is focused on the issuer,” Cohen told The Wall Street Journal. Nasdaq’s September 2025 SEC proposal pairs tokenized and traditional shares under the same CUSIP, settling through DTC — not a separate venue, but the same security in two forms. Corporate actions, proxy voting, and shareholder communication stay in the issuer’s hands.
That means Kraken is now the settlement rail for two TradFi exchange giants at once. Frankfurt and New York both picked the same partner within 36 days of each other. Leithner’s check is not a one-off bet on a crypto upstart — it is Europe catching up to a dance that had already started.
There is another signal behind the credibility reweighting. On March 4, Kraken’s banking unit became the first crypto firm to win a Federal Reserve master account — direct access to Fedwire, the same payment rail the banks use. Sen. Cynthia Lummis called it “a watershed milestone in the history of digital assets.” Bank lobbies howled. But the approval meant that by the time Cohen and Leithner each put pen to paper, Kraken was no longer a counterparty the compliance team needed to triangulate through intermediary banks. The firm was plugged into the Fed.
The Tokenized Equities Arms Race
Leithner is not the only one who sees the wave. Every major exchange is scrambling for position, and the crypto-native firms are racing from the other direction.
Nasdaq moved on two fronts. Nine days after the Kraken partnership, on March 18, the SEC approved rule change SR-NASDAQ-2025-072, letting the exchange trade certain securities in tokenized form during a pilot run by the Depository Trust Company. Eligible assets: Russell 1000 stocks and index-tracking ETFs including the S&P 500 and Nasdaq-100. Tokenized and traditional shares trade on the same order book with the same execution priority. The first tokenized trades on Nasdaq could hit by end of Q3 2026.
NYSE announced its own tokenized platform in January — 24/7 trading, instant settlement, stablecoin-based funding, fractional shares. In March, NYSE tapped Carlos Domingo‘s Securitize as the first digital transfer agent eligible to mint blockchain-native securities for issuers on the platform. ICE is working with BNY Mellon and Citi to support tokenized deposits and collateral.
DTCC itself got no-action relief from the SEC in December 2025, giving it a three-year window to run tokenization services. The DTC pilot lets participants tokenize security entitlements in Russell 1000 equities, U.S. Treasuries, and index-tracking ETFs — and move the resulting tokens between registered wallets on approved blockchains without DTC intermediating each transfer.
That is the TradFi side of the table. The crypto side is moving just as fast.
Kraken‘s xStocks are live in 110 countries — not the U.S. — with perpetual futures on tokenized equities offering up to 20x leverage, 24/7. Vlad Tenev‘s Robinhood launched its own blockchain in February — Robinhood Chain, built on Arbitrum — and already has over 2,000 tokenized U.S. stocks and ETFs live for EU customers. Tenev has been telling anyone who will listen that tokenized stocks could prevent another GameStop-style freeze. Coinbase is building Coinbase Tokenize, an institutional platform for tokenizing real-world assets including equities, with tokenized stocks planned for 2026. And Ondo is not just working with Clearstream — Allman tokenized five Franklin Templeton ETFs on Solana and got listed on Binance in February.
The pattern is unmistakable. Traditional exchanges are building tokenized venues. Crypto exchanges are tokenizing traditional assets. Both sides are converging on the same product: a stock that settles on a blockchain, trades around the clock, and can be fractionalized down to a dollar.
Why Arjun Took the Haircut
A 33% valuation cut in five months is not a normal secondary. Arjun Sethi is no stranger to the math. He runs Tribe Capital in addition to his Kraken seat — a $1.6 billion data-driven fund he co-founded in 2018 that has put money into FTX, Carta, Relativity Space, Docker, and Sfox, among others. He has watched a lot of cap tables get repriced. In October 2022 he told The Economic Times that up to 50% of startups would “have to sell or shut amid funding winter.” He does not wait for valuations to come back. He transacts through winters.
The haircut is the price of entry. What is on the other side of it is the one piece of the tokenization stack Kraken could not build or buy on its own.
Kraken’s xStocks are live in 110 countries — and banned from the one that matters most for scale. The U.S. retail market is walled off. That is why the $25 billion in cumulative volume is not $250 billion. Sethi cannot bootstrap his way past a regulatory perimeter. He has to buy a pipe into the jurisdictions that are open to him, and the richest jurisdiction open to him is Europe.
Clearstream sits on $20 trillion in custody and carries a name every fundster and prime broker on the continent trusts. Eurex is the largest derivatives exchange in Europe. 360X is a regulated digital asset venue with a live Ondo listing. 360T is one of the biggest FX platforms in the world. These are not items Sethi can list organically. They are licensed infrastructure. Leithner’s $200 million check gives him all of it at once, bundled with a white-label wrapper that lets European banks and fintechs offer crypto trading and tokenized equities under the Kraken rail.
It is also the Sethi playbook. When he wanted Mexico, he co-founded Kapital in December 2023, raised $165 million, and acquired Banco Autofin Mexico — bolting a licensed bank onto a tech stack to unlock a regulated market. When he wanted India, he formed Tribe Capital Management India Pvt Ltd in Gurugram in April 2024 and pointed 20% of Tribe’s AUM at the subcontinent. The Leithner deal is the European chapter of the same book. Buy the license. Lease the distribution. Pay in equity.
The valuation will correct. The distribution channel is permanent.
As an aside, the check also solves an IPO problem. Kraken has tried this twice before. Jesse Powell, Kraken’s co-founder and original CEO, announced plans to take the firm public in the second half of 2022; the crypto winter of that year killed the filing before it arrived, Powell stepped aside as CEO that September, and for the next three years Kraken stayed private while Coinbase, Circle, and Galaxy all beat it to public markets. Sethi and co-CEO David Ripley filed confidentially last November at a $20 billion valuation, ten days after closing an $800 million secondary led by Ken Griffin‘s Citadel Securities with $200 million in — followed by Jane Street, DRW, HSG, Oppenheimer Alternative Investment Management, Tribe Capital, and Sethi’s family office. A second crypto winter forced the listing back onto the shelf last month. Add the February firing of CFO Stephanie Lemmerman — replaced by deputy CFO Robert Moore in a reorganization that shifted finance from back office to product — and the picture is a firm that needed to reset its IPO story from the ground up. Leithner’s pre-IPO check, stacked on top of the Nasdaq-Backed partnership from March 9 and the Fed master account approved on March 4, is that reset. It says the grown-ups are in the room, and they brought their own furniture. The third time has to be the charm.
Why Stephan Is Steering for the Inside Lane
Sometimes a strong offense is the best defense. This is one of those times.
Leithner is not playing catch-up. He is cutting to the inside of the track, where the lap is shortest and the corner belongs to whoever gets there first. The $200 million check is not a hedge.
The man holding the pen is built for the play. The Austrian economist ran Deutsche Bank’s capital markets and M&A business for fifteen years and sat on its executive board from 2012. Before that he was a partner at McKinsey. He moved to Deutsche Borse’s board in 2018 and took the CEO chair on January 1, 2025. He is also a director at Digital Asset Holdings, the DLT firm behind the Canton Network — the same consortium that already includes Euroclear, Euronext, LSEG, and TreasurySpring. He is not a curious generalist who needs tokenization explained. He has been designing the plumbing for a decade, and he knows exactly which piece of the stack every one of his competitors is missing.
They are all in the race. Each of them is still building their engine.
LSEG announced its Digital Securities Depository in November 2025 — on-chain settlement, multi-chain, interoperable — and rolls out the first phase of its Digital Markets Infrastructure in 2026 on Microsoft Azure, targeting fixed income, equities, and private markets. London has the settlement layer and no retail crypto distribution.
SIX Group launched SIX Digital Exchange in 2020 and is now feeding data to Chainlink. Zurich has a five-year head start on the tech and a tiny footprint outside Switzerland.
Euronext took a stake in Tokeny in 2019 and went quiet. Amsterdam, Paris, Brussels, and Dublin between them have no native tokenized-equity venue live.
Euroclear sits alongside Clearstream in the post-trade duopoly and is in the same Canton working group — still waiting on its own retail wrapper.
Leithner just picked up what every one of them is still shopping for. In a single check he got a crypto exchange with an IPO in the pipeline, a tokenized-equities issuance engine through Backed, a subsidiary already partnered with Nasdaq five weeks earlier, the fastest-growing retail xStocks platform in the business, and a white-label rail that European banks and fintechs can plug into tomorrow. Clearstream handles the custody. Eurex handles the derivatives. 360X handles the digital venue. 360T handles the FX. The Kraken stake handles the front door.
The shape of what Leithner is building is now visible. Deutsche Borse’s own Horizon 2026 strategy commits the firm to “an expansion of the leading position in the area of digital platforms for existing and new asset classes.” That phrasing — “leading position” — is not defensive. The D7 digital securities registry is the back end. The Kraken deal is the front end. Together they form a full-stack digital capital market with a New York anchor (the Nasdaq-Backed partnership), a Swiss custody pool (Clearstream), and a Brooklyn-born crypto exchange (Kraken) all wired into the same plumbing and flying Frankfurt’s colors.
LSEG has to build its own retail distribution from scratch. SIX has to build continental scale. Euronext has to build everything. Leithner just bought all three in a secondary transaction for $200 million — a rounding error against the €24.5 billion market cap Deutsche Borse Group carries. By transacting with the same counterparty Tal Cohen transacted with, he is ensuring that when the tokenized equity rails settle into their permanent form, there are exactly two gravitational centers — Frankfurt and New York — and he is already inside one of them with a seat on the other’s settlement partner.
The Bottom Line
Tokenization of equities has been on the five-year roadmap of every major capital-markets firm since R3 launched Corda in 2016, and for a decade the pipeline never moved past pilots. Something changed this quarter. Nasdaq tied itself to Backed on March 9. Frankfurt wrote a check on April 14. The DTC pilot is live. The NYSE venue is under construction. LSEG‘s depository is in regulatory review. Robinhood has its own blockchain. Coinbase has a tokenization platform. The Fed let a crypto firm onto Fedwire for the first time in history.
Operators at Kraken’s stage do not accept 33% down rounds unless what is on the other side of the check is worth more than the valuation they are surrendering. Deutsche Borse does not pledge Clearstream’s $20 trillion custody pool to a technology it thinks is years away from mattering. Nasdaq does not put an equity-token design in front of the SEC as a hedge. Both sides of this trade — the one eating the haircut and the one writing the check — are transacting as if the tokenization of equities is happening now, not someday.
That is what the Sethi-Leithner handshake means. The tokenized stock era is not coming. It is arriving. The only question left is which firms own the rails when it does.
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Arjun Sethi, Co-CEO, Kraken
Related Coverage:
Deutsche Borse Group Acquires a Stake in Kraken for $200 Million — Deutsche Borse press release — April 14, 2026
Deutsche Borse Takes $200 Million Stake in Crypto Exchange Kraken — Bloomberg — April 14, 2026
Deutsche Boerse Acquires $200 Million Stake in Kraken — Reuters — April 14, 2026
Deutsche Borse (DB1) Buys 1.5% of Crypto Exchange Kraken for $200 Million — CoinDesk — April 14, 2026
Deutsche Borse Invests $200m in Kraken Crypto Exchange Group — Ledger Insights — April 14, 2026
Kraken Revives IPO Plans as Deutsche Borse Invests $200 Million — Quartz — April 15, 2026
Crypto Exchange Kraken Confirms It Has Confidentially Filed for an IPO — CNBC — April 14, 2026
Deutsche Borse Enters Into Strategic Partnership With Kraken as TradFi Bridge — Ledger Insights — December 2025
Kraken and Deutsche Borse Announce Strategic Partnership — Kraken Blog — December 2025
Nasdaq Partners With Kraken in Plan for 24/7 Tokenized Stock Trading — The Wall Street Journal (Vicky Ge Huang) — March 10, 2026
Nasdaq to Launch Equity Token Design, Putting Issuers at the Center of Tokenization — Nasdaq press release — March 9, 2026
Nasdaq and Kraken Are Teaming Up to Let You Trade Tokenized Stocks — CoinDesk — March 9, 2026
Kraken Becomes First Crypto Firm to Win Access to Fed’s Core Payments System — The Wall Street Journal (Alexander Osipovich and Dylan Tokar) — March 4, 2026
Payward, Parent of Crypto Exchange Kraken, Puts IPO Plans on Hold — CoinDesk — March 17, 2026
Kraken Joins Wave of Crypto Firms Filing to Go Public — The Wall Street Journal (Vicky Ge Huang) — November 19, 2025
Kraken Fires CFO Stephanie Lemmerman as Long-Awaited IPO Draws Closer — CoinDesk (Ian Allison) — February 10, 2026
Kraken Co-Founder Jesse Powell Steps Down as CEO of Crypto Exchange — Bloomberg — September 21, 2022
Arjun Sethi (Entrepreneur) — Wikipedia — accessed April 16, 2026
Stephan Leithner — CV — Deutsche Borse — accessed April 16, 2026
Deutsche Borse Announces New Investment Strategy Dubbed Horizon 2026 to Tap on Digital Assets — Coinspeaker — accessed April 16, 2026
LSEG Plans Digital Securities Depository for On-Chain Settlement — Ledger Insights — November 2025
Major European SIX Group Stock Exchanges Feeding Data to Chainlink — The Block — accessed April 16, 2026
SEC Approves Nasdaq’s Move to Allow Tokenized Securities Trading — CoinDesk — March 18, 2026
NYSE Taps Securitize to Build Tokenized Securities Platform — CoinDesk — March 24, 2026
NYSE to Launch New Venue for Tokenized Stocks — Ledger Insights — January 2026
DTCC Authorized to Offer New Tokenization Service — DTCC — December 11, 2025
Clearstream and Ondo Bring Tokenized Equities Infrastructure to Europe — Tokenization Insight — April 2026
Robinhood Launches Test Version of Its Own Blockchain — Fortune — February 10, 2026
Coinbase Plans All-in-One Exchange for Crypto, Stocks, and Commodities — Yahoo Finance — December 2025
SEC Release 34-105047: Nasdaq Tokenized Securities Rule Change — U.S. Securities and Exchange Commission — March 2026
Related Stories:
Andrew Crosses the Divide — CeFiWire — April 7, 2026
Hoops is Looking at Deals, Sets DWS on Tokenization Path — CeFiWire — February 2023
Stephan Leithner, CEO, Deutsche Borse Group.