Kraken Eyes $20B IPO as Tokenization Drives Crypto-Traditional Convergence

Crypto exchange Kraken has taken a significant step toward a potential U.S. initial public offering, filing confidentially with the Securities and Exchange Commission. The Wyoming-based company, which operates under the name Payward Inc., is working with major Wall Street banks like Morgan Stanley and Goldman Sachs to prepare for the listing, according to a Bloomberg report. The IPO could materialize as early as the first quarter of next year, with the company aiming for a valuation of up to $20 billion.

Kraken, founded in 2011, offers trading in both digital and traditional assets, including U.S. stocks and fiat currencies, and has recently expanded into tokenized equity trading. The company has been expanding its product suite and is now offering tokenized versions of stocks and exchange-traded funds.

This move aligns with broader trends in financial markets, where tokenization is gaining traction as a way to improve liquidity and access to traditional assets.

The SEC is currently navigating a complex landscape of regulatory priorities, including the oversight of digital assets and the clearance of a backlog of IPO filings. The government shutdown earlier this year led to a surge in submissions, and the agency is now working to address the pileup while also pursuing new rulemaking initiatives in the crypto sector.

Regulatory Shifts and Market Dynamics

The SEC under Chairman Paul Atkins has signaled a shift in strategy toward the crypto industry, emphasizing clarity and innovation. Atkins has outlined a new framework for digital assets, including a classification system that distinguishes between tokenized securities, functional network tokens, and collectibles. This initiative, known as "Project Crypto," aims to provide a more predictable regulatory environment.

The agency is also considering rules related to the offer and sale of crypto assets, aiming to clarify the regulatory landscape and provide greater certainty for market participants. This agenda reflects a broader trend of regulatory modernization, with the SEC seeking to align its oversight with the technological evolution of financial markets. However, delays are anticipated due to the backlog of filings and the complexities of rulemaking.

Crypto's Growing Influence on Traditional Finance

The expansion of tokenized assets is gaining momentum across both traditional and decentralized finance. Platforms like Bitget Wallet and CoinLander are introducing new ways for investors to access property-backed yields and tokenized equities. These developments are signaling a shift in how global investors engage with traditional assets, with tokenization enabling faster settlement, increased transparency, and reduced dependence on intermediaries.