Payward, the parent company of cryptocurrency exchange Kraken, has purchased an undisclosed amount of AAVE (CRYPTO: $AAVE) tokens as it expands its investment business and strengthens its position in decentralized finance (DeFi).

The purchases were made through Digital Asset Special Investments I, LP, a Payward-affiliated investment fund, and its asset management clients, according to an announcement on Thursday.

The tokens were acquired on the secondary market, meaning Payward bought them from existing holders rather than directly from Aave. The company said it could make additional purchases.

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Payward and Aave are also exploring opportunities for future collaboration, although neither company disclosed specific plans.

"As traditional and onchain markets converge, Payward believes DeFi is an integral part of the global financial system, with Aave playing a leading role in this evolution," Aave said on X.

The deal follows discussions first reported in June. An earlier proposal reportedly involved purchasing 250,000 AAVE tokens alongside a 15% equity stake in Aave Group at a $385 million valuation. Thursday's announcement did not mention any equity investment.

The purchase supports Payward's broader effort to build an asset management business covering digital assets. The company is also expanding into banking and financial infrastructure services for banks, fintech companies and other platforms.

Aave is a decentralized lending protocol that allows users to deposit cryptocurrencies to earn interest and borrow against their holdings through smart contracts. The platform has approximately $33 billion in net deposits and $11 billion in active loans, according to the announcement.

AAVE token holders can also vote on protocol decisions and treasury management.

Payward recently acquired US derivatives exchange Bitnomial in a deal worth up to $550 million and completed its acquisition of stablecoin payments firm Reap in July, following an agreement valued at up to $600 million.