Cryptocurrency exchange Kraken – one of the world’s largest cryptocurrency exchanges in terms of euro volume – has acquired crypto derivatives trading platform, Crypto Facilities.
The announcement was made earlier this morning via both Kraken and Crypto Facilities websites. The specific cost of the acquisition has not been disclosed. However, the press release refers to a “nine-figure” deal, implicating a deal with a minimum value of $100 million.
Crypto Facilities is a London-based trading platform which caters to the needs of high net worth individuals and institutions. It provides 24/7 trading on a range of cryptocurrency derivative products.
The bringing together of the two entities will mean that existing Kraken customers – who are considered to be “eligible” by the company – will be able to access cryptocurrency futures. That availability implicates six cryptocurrency trading pairs , providing customers with an efficient means to trade and hedge cryptocurrency in any market environment.
“I’m thrilled to welcome the Crypto Facilities team into the Kraken family”, stated Kraken CEO and co-founder, Jesse Powell. “We are excited to introduce eligible clients to these industry leading futures and index products. Over the coming months, our teams will continue to enhance and expand these offerings. We’ve got great stuff in store for traders and institutional clients in 2019.”
The statement confirms that Crypto Facilities will continue to be based out of London. It is already licensed and regulated by the U.K.’s Financial Conduct Authority (FCA).
Kraken confirmed that this is the largest acquisition the company has made to date, whilst being the largest such acquisition in 2019 and one of the largest in the industry to date generally. Up until this point, Kraken had made previous acquisitions which included Coinsetter, Cavirtex and CleverCoin. Additionally, it had brought in wallet funding service, Glidera and multi-exchange charting, trading and portfolio tracking platform, Cryptowatch.
It’s believed that Kraken decided to take the acquisition route in this instance as otherwise, it may have taken years of effort to obtain the necessary approvals and licenses needed in order to offer a cryptocurrency futures alternative in the European market.
Timo Schlaefer, Crypto Facilities CEO and founder also commented on the acquisition:
“It has been our mission to build the most sophisticated, powerful and user friendly cryptocurrency trading platform. Teaming up with Kraken allows us to innovate the next generation of products and tremendously boosts the value we are able to provide to our clients.”
Crypto Facilities was founded in 2015 and became the first regulated entity to offer futures on Bitcoin, Ethereum, Ripple (XRP), Litecoin and Bitcoin Cash. It is also a prominent cryptocurrency index provider, calculating and administering the Chicago Mercantile Exchange (CME) CF Bitcoin Reference Rate – which in turn, facilitates the CME’s Bitcoin futures offering. The reference rate index is managed by a Crypto Facilities subsidiary company, CF Benchmarks Ltd.
Last September, the New York Attorney General’s office referred Kraken – alongside a number of other cryptocurrency exchanges – to the state financial watchdog for potential violation of New York’s virtual currency regulations.
In response, Kraken’s CEO, Jesse Powell, suggested that “NY is that abusive, controlling ex you broke up with 3 years ago but they keep stalking you, throwing shade on your relationships, unable to accept that you have happily moved on and are better off without them.”