Kraken weighs $71M bet on Aave after KelpDAO fallout
Regulation & Gov ·
Exchange operator is in talks to buy a 15% stake in the DeFi lender at a $385 million valuation, as the protocol works through bad debt left by an April exploit.
Kraken, part of Payward Inc., is evaluating an investment that would give it a 15% common equity stake in Aave Group at a $385 million valuation, according to three people with knowledge of the matter cited by CoinDesk. The structure under discussion would have Kraken putting in 35,000 ether in exchange for 250,000 AAVE tokens plus the equity stake, a package two sources value at roughly $71 million. Kraken is also said to be looking to syndicate the deal to other investors.
The talks come months after Aave, the largest decentralized lending protocol, was pulled into one of DeFi's larger crises. In April, attackers linked to North Korea's Lazarus Group exploited KelpDAO's cross-chain bridge to mint roughly $292 million of unbacked rsETH, then deposited the tokens as collateral on Aave and borrowed real assets against them. When the collateral proved worthless, Aave was left with an estimated $190 million to $230 million in bad debt. Aave's own smart contracts were never compromised, but the episode still triggered more than $8 billion in withdrawals as users cut their exposure, underscoring how interconnected DeFi lending and bridge infrastructure have become.
A potential Aave stake would mark a further step in Payward Asset Management's push into DeFi and other investment activity, according to a third source, who said the firm has capital to backstop such deals and partners willing to co-fund them. Kraken and Aave have not commented on the discussions.
The move fits a broader pattern of Payward expanding beyond spot trading ahead of a possible public listing. In April, Payward agreed to acquire derivatives exchange Bitnomial for up to $550 million, adding CFTC licenses spanning brokerage, clearing and exchange operations, and CoinDesk has reported Payward was separately raising capital at a $20 billion valuation. Deutsche Börse has also put $200 million into Payward, according to The Block. Kraken has additionally been building out institutional infrastructure, including adding a Centrifuge-tokenized Janus Henderson bond fund to its qualified custody offering and launching an onchain warehouse facility with Maple for structured credit.
Terms of any Aave transaction, including how the syndication would be allocated and whether Aave's side will comment, remain unconfirmed, with coverage of the talks noted by outlets including wublockchain.xyz and tracked on X.