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Read Full BioCrypto exchange Kraken has completed a $100M deal to acquire Small Exchange, a CFTC-regulated Designated Contract Market. The move is a significant step toward Kraken launching a fully regulated, US-based derivatives market, which will offer futures and options contracts to both institutional and retail investors.
In the announcement, Arjun Sethi, Kraken’s co-CEO, said: “Kraken’s acquisition of a CFTC-regulated Designated Contract Market creates the foundation for a new generation of United States derivatives markets. It is designed for scale, transparency, and efficiency.”
He added, “This step 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 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.”
The acquisition agreement will see Kraken pay $32.5 million in cash, as well as $67.5 million in stock. Additionally, as part of the agreement, Kraken and IG Group will establish a partnership to distribute the contracts.
Kraken’s Global Market Integration Strategy
For Kraken, Sethi also stated that the move was not only aimed at the US market but was also part of a global strategy to unlock more products as markets became more efficient through increased integration.
“This acquisition is part of a larger build of global infrastructure. Kraken now operates regulated derivatives venues in the United Kingdom, the European Union, and the United States. The system spans six fiat currencies and more than 450 digital and traditional assets, all within one architecture.”
“Together, these elements create a network that moves collateral in real time, nets exposure across jurisdictions, and reduces capital inefficiencies that have long held back US traders. This is not about marketing or narrative. It is about building a better market structure.”
Competitors Eye Similar Expansion Plans
Kraken’s move comes as other major crypto and fintech platforms increasingly pursue regulated financial products.
One of its chief competitors, Coinbase, has also been increasingly moving into providing traditional financial services. It is also making moves to enter prediction markets. Earlier this year, Coinbase executives confirmed the company was “exploring new regulated market mechanisms,” following its registration as a futures commission merchant (FCM) with the CFTC.
Meanwhile, Robinhood Markets has already entered the prediction space through a partnership with Kalshi, a CFTC-regulated exchange for event contracts. Robinhood has recently indicated that it’s also exploring a possible acquisition to solidify its position in the sector further.
Robinhood’s and Coinbase’s strategies mirror those of Kraken in seeking the acquisition of already-regulated entities. This enables them to accelerate their expansion and foster the growth of institutional customer bases.
Elsewhere, Crypto.com has sought to strengthen its regulatory credentials through derivatives offerings in jurisdictions like Singapore and the European Union. It’s also testing prediction-style products in the United States. In September, Crypto.com announced a partnership with Underdog. That enabled the latter to offer sports prediction markets in 16 US states, primarily where sports betting is currently illegal.
However, the trading platform has also faced legal setbacks in the US. In October, a Nevada judge rejected a request by Crypto.com to block state enforcement actions against its prediction market operations.
Meanwhile, Binance continues to face regulatory stress globally over unlicensed derivatives.
The pattern is clear: crypto and fintech power players are racing to own or build regulated infrastructure for futures, options, and event contracts. Each seeks to become a comprehensive trading ecosystem that bridges digital assets and traditional financial instruments.
