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Kraken UK Derivatives Unit Sets Sights on Service Expansion: Bloomberg

Press Releases
Sep 8, 2023 at 11:18 am

Kraken's acquisition of Crypto Facilities has spurred active exploration of opportunities within the crypto derivatives market. This strategic move comes in the wake of FTX's collapse in November of the previous year. Crypto Facilities, an entity bought by Kraken in 2019, is presently in talks with the Financial Conduct Authority (FCA) of the U.K. regarding an expansion of its services to encompass a broader spectrum of client assets, as reported by Bloomberg.

This London-based firm specializes in furnishing institutional investors in the crypto sphere with futures contracts. Mark Jennings, the CEO, disclosed that there are ongoing negotiations to introduce futures contracts denominated in the fiat currency held by the client. Such an initiative necessitates an extension of their existing multilateral trading license, which was procured in 2020. Jennings approximated that this regulatory process may unfold over a span of six to twelve months.

Jennings underscored the strategic significance of this expansion, deeming it a pivotal driver in fortifying their presence in the institutional crypto market. The aftermath of FTX's collapse made a discernible impact, leading to a substantial reduction in daily trading volumes, which plummeted from the previous range of $700 million to $800 million.

The month of August witnessed a noteworthy downturn in the overall crypto derivatives market. The total trading volume contracted to $1.62 trillion, reflecting a decline of over 12% from the preceding month. This figure marks the second-lowest level observed since 2021, as per data sourced from CCData.

At present, neither Kraken nor the FCA have furnished immediate responses to inquiries made by CoinDesk.

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