Kraken buys Small Exchange for $100 million to launch US derivatives trading platform

Kraken has acquired Small Exchange, a CFTC-regulated Designated Contract Market, from IG Group for $100 million.

The acquisition allows Kraken to establish a fully U.S.-based derivatives trading platform, the company said in a Thursday announcement.

“This step connects spot, futures, and margin products inside a single regulated liquidity system … 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," said Arjun Sethi, co-CEO of Kraken.

This deal follows Kraken's earlier efforts to expand into the U.S. derivatives space, including the acquisition of NinjaTrader, a U.S. futures platform, earlier this year.

The U.S. crypto derivatives market has experienced significant growth over the past year, driven primarily by increasing institutional involvement and the expansion of regulated product offerings.

According to data from the CME Group, the dominant U.S. derivatives marketplace, cryptocurrency average daily volume rose 136% to 190,000 contracts in the second quarter of this year, compared to the same period last year.

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