BREAKING: Kraken Has Begun Talks to Acquire a Stake in an Altcoin Platform; Price Surges Suddenly – They Will Buy Tokens

Cryptocurrency exchange Kraken is reportedly in talks to acquire a 15% stake in decentralized finance protocol Aave. According to sources close to the matter, the potential investment prices Aave at a valuation of $385 million.

According to CoinDesk, Kraken, operating under Payward Inc., plans to invest 35,000 Ethereum (ETH) as part of the deal, receiving 250,000 $AAVE tokens and a 15% stake in Aave Group common shares.

Two sources close to the transaction said Kraken is also considering sharing this approximately $71 million deal with different investors through syndication. The sources requested anonymity because the discussions are private.

According to a third source close to the company’s plans, this investment could be one of the first deals planned as part of Payward Asset Management’s expansion. Kraken aims to take a more active role in DeFi and other investment opportunities with this move.

Aave is known as one of the largest decentralized lending protocols, allowing users to borrow and lend crypto assets without needing intermediaries. Users earn returns by providing assets to liquidity pools, while those wishing to borrow can use crypto collateral to obtain a loan.

However, Aave was at the center of one of the biggest crises in the DeFi ecosystem in April. Attackers linked to the North Korea-linked Lazarus Group exploited a vulnerability in KelpDAO’s cross-chain bridge to mint approximately $292 million worth of rsETH without any backing.

The attackers used these tokens as collateral on Aave to borrow real assets. After the collateral became worthless, it was estimated that between $190 million and $230 million in bad debt accumulated on the protocol.

Although Aave’s own smart contracts didn’t have a direct vulnerability, the incident prompted users to quickly exit the protocol to mitigate their risks. This resulted in an outflow of over $8 billion, once again highlighting the contagion risk inherent in interconnected structures within the DeFi ecosystem.

*This is not investment advice.