Kraken Seeks 15% Stake in Aave Group at $385M Valuation Amid DeFi Expansion

Kraken is in talks to acquire a 15% stake in Aave Group at a $385 million valuation, expanding its presence in decentralized finance (DeFi) through a strategic investment. The potential transaction involves Kraken investing 35,000 ether in exchange for 250,000 AAVE tokens and a 15% common equity stake in Aave Group.

The deal is estimated to be worth about $71 million, with Kraken exploring syndication for part of the investment. This move aligns with Kraken's broader strategy under Payward Asset Management, which aims to give the company a more active role in DeFi and other investment opportunities outside its core exchange business.

Aave is rebuilding after a major April crisis tied to KelpDAO's rsETH cross-chain bridge, where attackers linked to North Korea's Lazarus Group reportedly minted about $292 million of unbacked rsETH and used the tokens as collateral across DeFi platforms, including Aave. The incident left Aave facing an estimated $190 million to $230 million in bad debt after the collateral became worthless.

Standard Chartered has initiated coverage on Aave with a bullish report, stating that the protocol could benefit from renewed DeFi growth and tokenized real-world asset adoption. The bank expects assets actively used in DeFi to rise sharply by 2030, creating more potential demand for lending protocols like Aave's Horizon platform.