Crypto firm Kraken has acquired the Small Exchange from IG Group for $100 million, aiming to enhance its U.S.-based derivatives offerings.
Crypto company Kraken has announced its acquisition of the futures exchange Small Exchange from IG Group for $100 million. This strategic move positions Kraken to launch a comprehensive U.S.-based derivatives suite, further expanding its offerings in the cryptocurrency market.
Small Exchange is recognized as a designated contract market licensed by the U.S. Commodity Futures Trading Commission (CFTC). This acquisition provides Kraken with a regulated platform to offer futures and options to both retail and institutional clients.
“Under CFTC oversight, Kraken can now integrate clearing, risk, and matching into one environment that meets the same standards as the largest exchanges in the world,” stated Arjun Sethi, co-CEO of Kraken.
Kraken emphasized that by securing the necessary licensing and infrastructure, it is laying the groundwork for institutional-grade markets as the cryptocurrency sector matures. This acquisition comes at a time when the regulatory environment for cryptocurrencies in the U.S. appears to be becoming more favorable. President Donald Trump has been vocal in encouraging digital asset firms to expand within the country, promising clearer regulatory guidelines.
Earlier this year, Trump appointed a group to recommend policies for crypto markets, urging federal regulators to clarify rules surrounding the trading of digital assets and to facilitate the adoption of new financial products. On January 23, he signed Executive Order 14178, titled “Strengthening American Leadership in Digital Financial Technology.” This order halted previous initiatives aimed at developing a central bank digital currency (CBDC) and established the president’s “Working Group on Digital Asset Markets,” tasked with creating a comprehensive federal regulatory framework for digital assets.
The derivatives market is increasingly attracting digital asset firms that seek liquidity and risk management solutions. As the trillion-dollar cryptocurrency market evolves, it has moved beyond mere spot trading, with exchanges and investors now looking for institutional-grade tools such as futures, options, and tokenized assets.
This acquisition follows Kraken’s recent closure of a $500 million funding round. Founded in 2011, Kraken has gained significant attention for its high-profile acquisitions, including the U.S. futures platform NinjaTrader, and for launching new products in anticipation of an initial public offering (IPO) planned for next year. The latest funding round valued the company at $15 billion, with participation from investment managers, venture capitalists, and co-CEO Arjun Sethi through his Tribe Capital investment firm.
However, Kraken has also faced challenges, including a wave of executive turnover, with four senior executives departing the company as it streamlined operations in preparation for its IPO.
This acquisition of Small Exchange marks a significant step for Kraken as it seeks to solidify its presence in the evolving landscape of cryptocurrency derivatives.
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