At the end of June Backed Finance announced a collaboration with Kraken and ByBit to distribute xStocks, tokenized representations of US listed stocks, but only outside the United States. Just five months later Kraken is buying Backed for an undisclosed sum. Within the past six months on chain and exchange volumes for xStocks surpassed $10 billion, indicating a healthy appetite for the offering from the crypto community. The tokens can be traded 24/5 on Kraken and 24/7 on chain.
With more than 60 tokenized stocks issued, each one is backed 1 for 1 by the underlying securities, with custodians providing some transparency. However, token holders do not have direct ownership rights over the underlying stocks, they have creditor rights instead. The structure spans multiple jurisdictions: the issuer is based in Jersey (subject to Liechtenstein regulation), the tokenizer operates in Switzerland, and custodians are located in Switzerland and the US, with various aspects governed by Jersey, Swiss and New York law. Despite this complexity, xStocks has done rather well. Kraken’s acquisition may signal a shift toward consolidating this fragmented structure.
“Integrating Backed into Kraken strengthens the core architecture required for open and programmable capital markets. Unifying issuance, trading and settlement under one framework ensures the infrastructure for tokenized assets remains transparent, reliable and globally accessible. This is foundational work for the next era of market structure,” said Arjun Sethi, Co-CEO of Kraken. The acquisition comes two weeks after Kraken raised a funding round of $800 million, including backing from Citadel Securities.
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