In brief
- Crypto exchange Kraken has purchased U.S. contract market Small Exchange for $100 million from British finance group IG.
- The deal gives Kraken a license to offer derivatives trading in the U.S. for the first time.
- Kraken opened up futures trading for U.S. customers in July, amid positive regulatory changes in the U.S.
Kraken, one of the world’s largest crypto exchanges, has purchased U.S.-based contract market Small Exchange in a deal worth $100 million.
Founded in 2017, Small Exchange was part of the IG Group, the British financial services firm that owns and operates trading platform IG. Regulated by the Commodity Futures Trading Commission (CFTC), Small Exchange offers futures, derivatives, and options trading.
Kraken says the move “lays the foundation” for it to “launch a fully U.S.-native derivatives product suite” and a unified “trading environment.” Kraken doesn’t currently offer derivatives trading in the U.S., but says the latest purchase gives it the right to design and create markets for exchange-listed derivatives in the U.S., with CFTC oversight.
According to the announcement, the deal consisted of $32.5 million in cash and $67.5 million in stock in Kraken’s parent company, Payward. No indication was given of exactly when derivatives trading will become available to U.S. users.
The news comes after Kraken began offering CME-based futures trading to customers in July of this year, shortly before the signing of the GENIUS Act and Clarity Act, which gave futures trading significantly more regulatory clarity than before.
Arjun Sethi, co-CEO of Kraken, said 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.”
Under the terms of the deal, IG will retain its partnership agreement with Kraken and will continue to distribute products via Small Exchange.
Kraken snaps up U.S. exchanges
This isn’t the first U.S. exchange Kraken has purchased this year. It acquired another futures trading platform, NinjaTrader, in a $1.5 billion deal in March, citing similar benefits like increased performance. In September, it acquired proprietary trading platform Breakout.
But Kraken has been snapping up futures exchanges for years. In 2019, it acquired Crypto Facilities, a UK FCA-regulated Multilateral Trading Facility (MTF), ahead of launching futures trading in the EU earlier this year.
The moves come as Kraken is reportedly planning an IPO sometime in the near future, with Bloomberg’s sources earmarking a January 2026 listing on the Nasdaq.
IG is also eyeing its own entry into the crypto industry and was granted a cryptoasset licence by the UK’s Financial Conduct Authority (FCA) in September, after starting to offer crypto trading to UK customers in June.