Author: Zen, PANews
On October 14, Payward, the parent company of Kraken, announced that it had signed a definitive agreement to acquire Lithuania-based Saldo Bank. The transaction counterparty is actually the latter's Finnish parent company, Saldo Finance Oy. The purchase price has not been disclosed, and the deal is expected to be completed in 2027, subject to relevant regulatory approvals.
The bank is small in scale, yet it possesses a key resource that Payward has been seeking: an EU banking license. Saldo Bank currently operates in Lithuania, Finland, Sweden, and Germany, and holds the relevant passporting qualifications to enter the Dutch market. Its existing business covers retail term deposits, consumer loans, SME credit, credit cards, and embedded financial services.
Under Payward's plan, after the acquisition is completed, the group will further integrate bank deposits and lending, payments, credit cards, and digital asset services, enabling customers to manage cash, cryptocurrencies, tokenized stocks, and credit products within the same financial system.
Payward's acquisition of Saldo Bank is the first transaction in Europe in which a digital asset company acquires a bank. One of the key figures driving this expansion is Arjun Sethi, co-CEO of Kraken and Payward. And Sethi's career transition likewise illustrates a path along which crypto capital continues to extend into the traditional financial system.
From mini-game developer to Silicon Valley investor
Arjun Sethi, now 43, began his career far removed from the financial industry.
Sethi grew up in the Silicon Valley area of the United States, was exposed to software development at an early age, and subsequently entered the internet entrepreneurship space. In the mid-to-late 2000s, social network Facebook rose rapidly, making games and applications developed on top of social platforms a popular entrepreneurial direction at the time.
Sethi was one of them. Around 2007, he founded the social gaming company Roflplay. In 2009, the company was acquired by another social application developer, Lolapps, and Sethi subsequently joined Lolapps' management.
LOLapps likewise focused primarily on developing social games and applications around Facebook. As the company entered a phase of rapid growth, that growth also brought operational challenges, and Lolapps' CEO at the time proposed that Sethi take over the company's management.
At that time, Sethi lacked experience in corporate restructuring and operational management, so he carefully read the book Who Says Elephants Can't Dance? by former IBM CEO Lou Gerstner, learning how this legendary manager drove IBM's successful transformation and revival. He also wrote the valuable content from the book on index cards and tried to apply these management methods to running the company.
In March 2010, Sethi officially became CEO of Lolapps. In the social gaming industry at the time, developers needed to continuously buy traffic, analyze user retention, and adjust products based on data. It was also during this period that he began to develop the management approach that would run through his career: understanding user behavior through data analysis, then driving growth through faster product iteration and marketing decisions.
During this period, LOLapps launched a large number of entertainment and interactive products familiar to Facebook users, such as the once-popular Sex and the City character personality test. The monthly active users of LOLapps' products once reached 100 million, and the company was ultimately sold for $240 million.
Sethi then entered the mobile instant messaging market. In 2013, Sethi co-launched MessageMe, seeking to compete for users during a period when instant messaging applications such as WhatsApp were growing rapidly. MessageMe grew quite rapidly in its early stage; about two and a half months after launch, its user base exceeded 5 million, and it successively received support from investment institutions including a16z, Greylock Partners, and Google Ventures.
In October 2014, Yahoo acquired MessageMe. Sethi, as a core founder, was subsequently absorbed by Yahoo and put in charge of work related to growth, data science, and emerging products.
Two entrepreneurial ventures took Sethi through the complete process from rapid growth to corporate integration, and also gradually shifted his interest toward helping more startups discover growth opportunities. During his entrepreneurial period, he had already begun making personal angel investments through referrals from his network. As his investment experience accumulated, he gradually realized that investment institutions likewise needed a methodology capable of systematically evaluating a company's growth potential.
Around 2016, Sethi joined Social Capital, the venture capital firm founded by former Facebook executive and well-known investor Chamath Palihapitiya, as a partner. In 2018, Sethi, together with Social Capital co-founder Ted Maidenberg and partner Jonathan Hsu, co-founded Tribe Capital, formally transitioning from internet entrepreneur to professional venture investor.
From left to right: Arjun Sethi, Jonathan Hsu, and Ted Maidenberg
Unlike many VCs that make judgments based on founder background, market size, and industry experience, Tribe Capital places greater emphasis on a company's actual operating data. Its investment approach includes analyzing user retention, revenue growth, changes in the customer base, and the degree of product-market fit, in order to identify companies with sustained growth potential. For Sethi, this approach was also the one he knew best.
And Tribe Capital's venture investment business also gradually became an important starting point for his entry into the crypto finance industry.
Losing "$400 million" in Bitcoin, and ultimately becoming Kraken's new leader
After Tribe Capital was founded, its investment areas gradually expanded from internet software to fintech, cryptocurrency, and artificial intelligence. Its portfolio includes companies such as Carta, Docker, and xAI. Sethi had previously also participated through personal investments in technology companies such as Gusto, Lyft, and Opendoor.
Beyond capital investment, Sethi also increasingly entered the crypto industry. He had brushed shoulders with Bitcoin early in its development. Sethi has said that when he was running an internet company in his early years, a developer once gave him a computer containing Bitcoin mined by that developer, but he later discarded the computer. By his estimate, if those bitcoins had been preserved to this day, they might be worth $300 million to $400 million.
From discarding it as worthless to deeply entering the cryptocurrency industry, what truly prompted Sethi's major shift was Tribe Capital's investment in Kraken. In 2021, he formally joined Kraken's board of directors and began participating in the development of this crypto exchange from the perspectives of investor and director.
Over the following years, he experienced the crypto industry's deep adjustment from bull market to the post-FTX collapse, and also gradually built closer working relationships with Kraken founders Jesse Powell and Thanh Luu. In October 2024, Kraken announced that Sethi would serve as co-CEO, leading the company together with Dave Ripley.
Since taking the helm at Kraken, Sethi's home not far from Stanford University has become an important workplace for Kraken. At this residence in Menlo Park, United States, a rarely driven black Cybertruck is parked in the driveway, electronic equipment is placed in the open garage, and people come and go from time to time. There is almost no decoration inside the house, and a German Shepherd moves about in the backyard.
Ahmed, CEO of the Dubai Multi Commodities Centre (DMCC), visiting Sethi's residence (front: Ahmed; back: Sethi)
According to Kraken founder Jesse Powell's explanation, since joining the board in 2021, Sethi has helped Kraken get through multiple difficult periods and thus earned the trust of management.
For Sethi, who started out in internet entrepreneurship and transitioned midway into investing, whether in product operations, capital investment, or company management, data has always been an important basis for decision-making. This style has also been brought by him into Kraken. Sethi said that Powell hoped he would bring the quantitative management methods he used when running companies in the past into Kraken, helping the company further develop businesses beyond the exchange.
A new broom sweeps clean. Not long after taking office, Sethi first pushed for organizational restructuring. Kraken announced that it would reduce management layers, simplify its internal organization, and carry out layoffs. Sethi also adopted a "flat" management style rare in large companies, with a large number of business leaders reporting directly to him.In early 2025, Sethi revealed in an interview that he had approximately 50 to 70 direct reports and had developed six or seven automation tools to handle the large volume of information generated across channels such as GitHub, email, and Slack.
This highly centralized management approach also prompted differing internal assessments. A September 2025 investigative report by Fortune, citing former executives, said that Sethi places greater emphasis on data and execution efficiency and pays relatively limited attention to employee morale and the existing management system. Another former executive believed that this management adjustment helped Kraken improve efficiency and prepare for a subsequent IPO.
Dual role: simultaneously at the core of Kraken and Tribe Capital
While managing Kraken, Sethi retained his role as chairman of Tribe Capital. This means he was simultaneously positioned at the core of a crypto exchange's management and a venture capital firm.
This overlapping identity was subsequently further reflected in capital transactions. In September 2025, Kraken completed a $500 million financing at a valuation of $15 billion, with investors in the round including Tribe Capital and Sethi personally.
Two months later, Kraken announced a total of $800 million in financing commitments and brought in institutional investors such as Citadel Securities at a valuation of $20 billion.
It is worth noting that, according to Kraken's official announcement, Tribe Capital participated in the main portion of this financing round, and Sethi's family office also made a large investment commitment. As the company's valuation rose, the relationship between Sethi and Kraken had come to simultaneously involve a management position, the original board relationship, and personal and institutional capital investment.
In this regard, a former executive interviewed by Fortune raised concerns that Sethi's continued service as chairman of Tribe Capital could create a conflict of interest between investment decisions and company management. A Kraken spokesperson responded that Sethi is not responsible for Tribe Capital's day-to-day operations and that his dual role had been approved by Kraken's board and Tribe Capital's limited partner advisory committee.
This capital connection continued to extend. In January 2026, a special purpose acquisition company (SPAC) named KRAKacquisition Corp listed on Nasdaq, raising $345 million in its offering.
According to the prospectus filed with the U.S. SEC, the company's sponsor, NCTK Sponsor LLC, was jointly formed by Kraken, Tribe Capital, and Natural Capital.
The three parties hold equal membership interests in the sponsor entity and each appoints one representative to the sponsor's management committee to jointly manage the securities it holds and related investment decisions. KRAKacquisition plans to focus on identifying potential merger targets at the intersection of traditional finance, fintech, cryptocurrency, and decentralized finance.
From investing in Kraken, joining the board, and serving as co-CEO, to participating in financing through Tribe Capital and the family office, and then to the two institutions jointly sponsoring a SPAC, the relationship between Sethi and Kraken has formed a multi-layered capital and governance relationship.
Serial acquisitions: Kraken's next move in a new financial game
After Sethi entered Kraken's management, the company's acquisition pace accelerated significantly.
In March 2025, Kraken announced the $1.5 billion acquisition of U.S. futures trading platform NinjaTrader.
The deal brought Kraken mature futures trading software, a trader customer base, and infrastructure related to the traditional derivatives market.
NinjaTrader had approximately 2 million customers at the time, which also enabled Kraken to directly enter the U.S. traditional futures market beyond its existing cryptocurrency trading users. In the same year, Kraken also acquired companies such as Small Exchange, Breakout, and Capitalise.ai, supplementing capabilities in U.S. derivatives trading, trader services, and automated trading, respectively.
In the tokenized asset sector, Kraken launched xStocks and further acquired Backed Finance, the issuer underlying its tokenized stocks, bringing the issuance and trading of tokenized stocks into the same group system.
Entering 2026, M&A continued to advance.
In February, Payward acquired token management platform Magna, expanding token distribution, vesting management, and related infrastructure services.
In May, Payward completed the acquisition of U.S. derivatives platform Bitnomial for consideration of up to $550 million. The acquisition gave it qualifications related to futures commission merchants, contract markets, and derivatives clearing organizations under the U.S. Commodity Futures Trading Commission regulatory framework.
In July, Payward completed the acquisition of Reap, a stablecoin payments and card issuance infrastructure company. The maximum consideration previously announced for the deal was $600 million.
The Bitnomial and Reap acquisitions both used a combination of cash and equity as payment, with the agreements valuing Payward's equity at $20 billion.
Looking at these acquisitions together, the business logic behind them becomes clear: NinjaTrader expanded the traditional financial trading user base; Bitnomial supplemented U.S. compliant derivatives trading and clearing capabilities; Backed Finance and xStocks improved the tokenized stock business; and Reap brought payments, card issuance, and cross-border fund flows into the group's service scope.
Now, Saldo Bank further supplements traditional bank deposit, lending, and payment infrastructure. Payward hopes to thereby build a financial services system covering trading, custody, payments, financing, and asset management, and to serve retail traders, institutional clients, and fintech companies through different brands under its umbrella.
In the October 14 acquisition announcement, Sethi explicitly stated that Payward Banking had been under construction for many years and that the group was filling in financial infrastructure market by market and license by license. He believes that institutions that hold customers' core financial relationships can further provide trading, wealth management, and treasury management products around services such as deposits, loans, and payments.
Continuous acquisitions also place higher demands on the group's operations. For Sethi, this expansion also brings new operational tests. In the past, he could diversify risk through an investment portfolio and judge which companies had long-term growth potential. Now, as Payward's co-CEO, he needs to directly bear responsibility for business integration, organizational management, capital allocation, and regulatory compliance.
Payward has already obtained more financial licenses and business capabilities through acquisitions. The key next step is to integrate businesses scattered across different markets and different regulatory systems into a financial group capable of sustained profitability.
For this exchange leader who came from the venture capital world, acquiring a European bank is only a new starting point. How to integrate the successively acquired businesses into a financial system capable of sustained profitability will be the real test facing Arjun Sethi.