- Kraken has agreed to buy the U.S. contract market Small Exchange for $100 million.
- The acquisition gives Kraken a license to offer regulated derivatives trading in the United States for the first time.
- The deal includes $32.5 million in cash and $67.5 million in equity in Kraken’s parent company, Payward.
- Kraken also acquired NinjaTrader and Breakout earlier this year, expanding its trading services.
- IG Group, the seller of Small Exchange, has gained regulatory approval to provide crypto trading in the UK.
Kraken, one of the world’s largest cryptocurrency exchanges, has purchased U.S.-based Small Exchange in a $100 million deal. The acquisition will allow Kraken to launch regulated derivatives trading in the U.S., which includes futures and options contracts.
The deal involves $32.5 million in cash and $67.5 million in stock in Kraken’s parent company, Payward. Small Exchange was previously owned by the British financial company IG Group. With this purchase, Kraken will be able to create and manage trading markets for exchange-listed derivatives in the United States, subject to oversight from the Commodity Futures Trading Commission (CFTC).
According to the official announcement, Kraken plans to launch a unified trading environment for derivatives, spot, and margin products. Co-CEO Arjun Sethi stated, “The deal connects spot, futures, and margin products inside a single regulated liquidity system, reducing fragmentation, lowering funding latency, and bringing onshore the kind of access and performance that has mostly existed offshore.”
This acquisition follows Kraken’s move to enable futures trading for U.S. customers in July after new U.S. laws provided more regulatory clarity for crypto derivatives. The company has also acquired the trading platforms NinjaTrader and Breakout in the past year, as well as UK-based Crypto Facilities in 2019. These steps position Kraken to offer a wider range of trading services, both in the U.S. and internationally.
Meanwhile, the seller IG Group retained a partnership with Kraken and will continue distributing products through Small Exchange. In a separate development, IG Group received a cryptoasset license from the UK’s Financial Conduct Authority to expand its own digital asset services, as detailed in its official statement.
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