Volumes on Kraken's platform dropped 18% to $310 billion in the quarter, and the exchange cut roughly 150 jobs as it prepared for a listing that may still slip into 2027.
Payward, the parent company of Kraken, reported second-quarter earnings on Thursday that pull in opposite directions: adjusted revenue up 17% year over year to $508 million, adjusted pretax earnings down 71% to $23 million. Trading volume across the platform fell 18% to $310 billion. Funded accounts, defined as any account holding a balance above zero, rose 42% to a record 6.6 million.
Read together, those numbers describe a business collecting more small customers, extracting less profit per trade, and pulling increasingly diversified fees from a thinner base of activity. Asset-based and other revenue climbed to 60% of the total from 55% a year earlier. Whatever growth the exchange still has is coming from custody, staking, derivatives and equities — not spot trading.
Payward disclosed the numbers in a shareholder letter seen by Bloomberg. It has not filed with the SEC because it does not need to. The company is still private, though a listing has been rumoured for more than two years. Co-chief executive Arjun Sethi told shareholders that traditional futures, tokenised equities and equities activity all grew in the quarter, and that Kraken had gained spot market share for a third consecutive quarter. Both of those claims can be true while pretax earnings collapse to a third of what they were.
The context is not just Kraken. Bitcoin is trading roughly half of the October 2025 record. Gemini reported another quarterly loss on Thursday. Coinbase renewed its Circle stablecoin deal on the same terms after a $908 million year, and its take-rate economics have thinned in successive quarters. The exchanges that built their businesses on fees over spot volume are all learning the same lesson at the same time.
Payward has been visibly preparing for a different economy. It cut roughly 150 jobs earlier this year, with Sethi citing efficiency gains from artificial intelligence. That is a smaller round than Coinbase's 14% workforce cut in July, but the framing is the same. Kraken has also opened DEX trading on 2,500 Solana tokens inside the main app, extended a MoneyGram cash off-ramp into 100 countries, and pushed into tokenised equities and derivatives ahead of the CFTC's expected clarity work later in the year.
The push into tokenised equities looks especially deliberate. Kraken has been listing tokenised US stocks since April, initially outside the US and now increasingly through US-registered vehicles. If Sethi's growth claim in that vertical holds, the exchange is picking up business exactly where its main competitor for a US listing, Gemini, has struggled to convert regulatory wins into revenue.
None of that fixes the underlying arithmetic. A 71% collapse in adjusted pretax earnings against 17% revenue growth means costs are rising fast, gross margin is compressing, or both. Payward has not disclosed which. The 60% asset-based revenue mix suggests trading fees are being replaced with lower-margin custody and staking economics, which would fit the market share gain and the earnings drop equally well.
The funded-account growth is the number Kraken would most like investors to focus on. Six-and-a-half million paying users, up 42% year over year, is genuinely impressive in a market where competitors are shrinking. It is also the metric that ages best in a shareholder deck: an account that holds a dollar today can hold thousands tomorrow if the cycle turns. What it cannot do is generate quarterly revenue on its own, and Payward's transaction volume line is the direct evidence that the average new customer is not trading much.
The company had told Bloomberg earlier this year that an initial public offering was possible in late 2026 or early 2027. Thursday's disclosure does not obviously accelerate that timeline. Public equity investors comparing Kraken's numbers with Coinbase's will see a business roughly a fifth the size, growing customers faster, generating less profit per customer, and disclosing far less about how the top line is constructed. Payward has time to fix the last of those before it needs to file.
Sethi's letter did not include forward guidance. The strongest signal about how Payward reads the current market is not in the numbers but in the balance-sheet moves around them: 150 job cuts, an accelerating product roadmap outside spot, and a decision to continue funding the equity buyback and product spend that this quarter's earnings will not cover.
Kraken is not in trouble. The exchange that once made the case for owning crypto infrastructure through the cycles is now making it in an environment where the cycle has moved against fee-based crypto brokerage. The next few quarters will decide whether the new account growth converts into revenue or into more discounted zero-balance customers.
