Kraken Offers Cash-Settled Futures Trading in Light of $100M Acquisition

Kraken, the San Francisco-based cryptocurrency exchange operating in Canada, the EU, Japan, and the US has officially acquired Crypto Facilities, a regulated futures trading startup. Announced Monday, the undisclosed deal is valued at least $100 million and marks the largest acquisition in 2019 thus far.

The acquisition will enable cash-settled trading for Bitcoin (BTC), Bitcoin Cash (BCH), Ripple (XRP), Litecoin (LTC), and Ethereum (ETH) trading pairs for Kraken customers based in Europe.

Key Acquisition for Kraken and Their Roadmap

As reported by Coindesk, Kraken’s CEO Jesse Powell said the Crypto Facilities acquisition will massively accelerate his company’s vision of bring regulated futures trading to Europe. Without the acquisition, it may have taken Kraken years to acquire the appropriate licenses and approvals from regulators.

Crypto Facilities is already registered with the UK Financial Conduct Authority (FCA) and will still remain regulated under Kraken’s control.

Powell exuberated the importance of this acquisition by saying:

The deal brings our total developer team to over 100 and will accelerate Crypto Facilities by enabling us to add more assets. We plan to launch more contracts in the medium-term and Kraken also has plans to launch more assets.

Moreover, to help with a smooth transition, the Crypto Facilities CEO Timo Schlaefer will retain his title as CEO and all 25 Crypto Facilities employees will remain working. Even though Kraken acquired the futures trading startup, the firm will remain an independent entity within the larger Kraken Group.

Regarding the merger, Powell is optimistic about what the future holds, stating:

The objective we have is to build the most liquid futures exchange.

Adding to Powell’s excitement, Schlaefer stressed the benefits their futures trading presents to their European customer base, stating that customers can trade overnight and weekends, which far extends the hours that US traders futures traders are offered.

Schlaefer added:

You can margin in real time, you don’t have to provision for gap risk overnight or over the weekends, you can take less margin which is more capital efficient.

Kraken Stands Out From a Crowded Market

Not only will Kraken’s acquisition slingshot the exchange into the European crypto-futures trading market, but it will also put Kraken on the map of highly reputable crypto exchanges in a crowded market.

As stated by Powell:

Right now there isn’t anything else. In Europe, we are the only regulated platform for derivatives and we’re not aware of anything in the pipeline.

Do you think licensed and regulated crypto exchanges like Kraken are better than unregulated exchanges like Binance? Let us know what you think in the comment section below.

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