The cryptocurrency exchange Kraken has taken a decisive step in its global expansion. The platform announced this Thursday the acquisition of Small Exchange, a U.S. futures market. The firm was purchased from IG Group for $100 million. Kraken co-CEO Arjun Sethi confirmed the operation in an official statement. This move is key as Kraken expands derivatives in the U.S.
The financial agreement was structured in two parts. Kraken will pay $32.5 million in cash for the platform. The remaining $67.5 million will be completed through shares of Payward, Kraken’s parent company.
For the seller, IG Group, the transaction is highly profitable. The British firm booked a net profit of £73.3 million (approximately $89 million). Breon Corcoran, CEO of IG Group, described the sale as “a significant return.” IG Group will use this capital to refocus its operations in Australia and the United Kingdom.
The main asset acquired is the Small Exchange license. It is a Designated Contract Market (DCM). This license is granted and supervised by the Commodity Futures Trading Commission (CFTC). It is one of the most difficult regulatory authorizations to obtain in the country.
This acquisition addresses a historical problem in the U.S. crypto market. American investors have suffered notable market fragmentation. Usually, spot trading (direct purchase) and futures trading (derivatives) occur on separate venues. Often, the most sophisticated derivative products were only available on “offshore” platforms.
Kraken seeks to eliminate this friction. By obtaining the DCM license, the platform can unify these services legally within the U.S. Arjun Sethi noted that this “reduces funding latency.” It also brings to the local market “the kind of access and performance that has mostly existed offshore.” The goal is to create a robust and regulated ecosystem on U.S. soil.
Does this mean the end of offshore dominance for U.S. traders?
Kraken’s move redefines the competitive landscape in North America. It places the platform in a significant regulatory advantage against its rivals. While other compañías (companies) struggle for regulatory clarity, Kraken has secured a direct path from the CFTC. This allows it to design and list its own futures contracts.
The impact is not just regulatory, but also structural. Sethi emphasized that this purchase “creates the foundation for a new generation” of derivatives markets in the country. By integrating clearing, risk, and execution in one environment, Kraken can offer greater capital efficiency. This is attractive to both retail and institutional investors.
The move also follows Kraken’s trend of building a global infrastructure. The firm had already acquired Crypto Facilities in the United Kingdom in 2019. Furthermore, it holds licenses to operate derivatives in the European Union. This acquisition consolidates its presence in the three largest financial markets.
This transaction marks a strategic exit for IG Group from the U.S. derivatives market. However, the relationship between the two firms does not end here. The agreement includes a strategic distribution partnership. IG Group and Kraken will collaborate to offer new crypto products to their respective audiences.
The industry is now closely watching the company’s next steps. The integration of Small Exchange into the Kraken Pro ecosystem will be crucial. Analysts expect to see which new futures contracts will be listed first. This acquisition solidifies Kraken as a formidable player in the regulated sector.
