Kraken launches an institutional platform for spot and derivatives trading

What’s new? US crypto exchange Kraken has launched a platform for institutional investors. According to the company’s representatives, Kraken Institutional will be a separate brand that unites a set of products and services for banks, asset managers, hedge funds, and high-net-worth individuals. The platform will offer a spot exchange, derivatives trading, custodial services, and indices from Kraken subsidiary CF Benchmarks.

Press release

What else is known? Kraken Institutional’s full suite of products is scheduled to launch later this year, including qualified custody services, and will be provided by Wyoming-registered custodian Kraken Financial.

According to Kraken’s global head of institutional business, Tim Ogilvie, the new brand is less about capturing existing market share and more about paving the way for new entrants into the digital asset class.

The company expects rapid growth in institutional adoption of cryptocurrencies due to the recent admission of spot bitcoin exchange-traded funds (ETFs) to the US market.

An institutional platform from crypto exchange Coinbase is already operating in the United States. Coinbase Prime, launched three years ago, offers institutional storage, trading, and analytics. It currently acts as a bitcoin custodian for most issuers of spot BTC ETFs.

Late last year, securities regulator SEC accused Kraken of operating without registration, commingling customer funds with its own and unregistered offering of securities in the form of tokens. The exchange refused to reduce the set of services offered and later filed a motion to dismiss the lawsuit.

Meanwhile, early last year, Kraken paid a $30 million fine at the request of the SEC and stopped providing staking services in the United States.

Also last year Kraken bought the Dutch crypto broker BCM and received licenses from regulators in Italy, Spain, and Ireland as part of its strategy to expand its business in Europe. In addition, the exchange began talks with blockchain developer Polygon to launch its own Layer 2 (L2) network.