Kraken has acquired futures exchange Small Exchange from IG Group for USD 100 million, aiming to launch a fully US-based derivatives suite.
Following this announcement, under CFTC oversight, Kraken will now have the possibility to integrate clearing, risk, and matching into one environment that meets the same standards as a large exchange institution.
In addition, once the preserve of banks and brokers, the derivatives market is expected to draw digital asset firms looking for liquidity and risk management. According to Reuters, analysts also mentioned that the process of adoption is likely to accelerate as more institutional and traditional financial players enter the digital asset space.
More information on Kraken’s USD 100 million deal for Small Exchange
The derivatives market is likely to pull closer together in the future, with big exchanges and fintech firms first testing offerings like tokenised futures and hybrid products at the edges, then accelerating the process of rolling them out more widely. At the same time, crypto-linked futures and options have been among the fastest-growing segments in the market, as investors seek to manage risk.
Through the process of securing the necessary licensing and infrastructure today, Kraken aims to accelerate the development of institutional-grade markets as crypto matures. Furthermore, the deal also comes as a more crypto-friendly regulatory tone under US President Donald Trump encourages digital asset firms and institutions to expand in the country with promises of clearer rules.
The announcement also follows Kraken’s reported plans to raise USD 500 million in funding, as well as its USD 15 billion valuation. The funds aimed to strengthen the crypto exchange’s position amid growing speculation that it is preparing for an IPO. At the same time, this news also circulated back in July, when there were speculations that Kraken is seeking USD 500 million, a move interpreted as a step towards an IPO. However, Kraken has not filed any regulatory paperwork for an IPO, and the institution has yet to submit an S-1 registration statement to the US Securities and Exchange Commission (SEC), a necessary step for any US public offering.
