Kraken has signed a $100 million deal to acquire Small Exchange, a U.S. derivatives platform regulated by the Commodity Futures Trading Commission (CFTC). This move could give the crypto exchange a serious foothold in America’s highly scrutinized but fast-growing crypto futures market.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
The acquisition, which includes $32.5 million in cash and $67.5 million in stock, gives Kraken direct access to a Designated Contract Market (DCM) license, something that’s long been out of reach for most crypto-native firms.
Kraken Creates Full-Service Derivatives Arm in the U.S.
More than just a venue buy, Kraken now owns one of the few regulated crypto trading platforms that can legally offer futures and options to U.S.-based traders. The company said this would allow it to integrate clearing, matching, and risk functions under one roof. Essentially, this would streamline its derivatives operations while ensuring it remains compliant with federal regulations.
Beyond that, the deal expands on Kraken’s long-term goal of building a full-stack institutional platform. Earlier this year, the firm acquired NinjaTrader for $1.5 billion, targeting global futures and margin products. Small Exchange fills the regulatory gap at home, the U.S., where most crypto firms struggle to get proper licensing.
Kraken Bets on Regulated Growth
Kraken’s move comes as rivals like Coinbase, Binance, and Bitfinex face ongoing scrutiny over offshore derivatives offerings. By owning a CFTC-licensed exchange, Kraken is now uniquely positioned to offer regulated U.S. crypto futures, giving it a head start in what may become one of the most important segments of the digital asset market.
Moreover, derivatives volumes continue to outpace spot trading globally. This is a sign that the most sophisticated investors prefer hedging, leverage, and longer-term contracts over simply buying and holding coins. Kraken is clearly placing a bet that U.S. traders, too, will seek that functionality once proper rails are in place.
Institutional Crypto Arms Race Just Escalated
Kraken’s acquisition may not immediately send shockwaves through markets, but it signals a quiet arms race in crypto infrastructure. With Small Exchange now in hand, Kraken becomes one of the only firms with both global crypto liquidity and a U.S. futures license, something its competitors are still chasing.
If the exchange can successfully scale its regulated derivatives business, the $100 million price tag could look like a bargain. And as U.S. regulation begins to favor compliant firms, Kraken’s first-mover status in this space might finally pay off.
Investors can track the prices of their favorite cryptocurrencies on the TipRanks Cryptocurrency Center. Click on the image below to find out more.
