Crypto trading platform Kraken has secured a license enabling it to offer crypto derivatives within the European Economic Area (EEA). Kraken, in an announcement, revealed that its expanded offering allows customers within the EEA to access perpetual and fixed maturity futures that are compliant with MiFID II (Markets in Financial Instruments Directive). Kraken is rolling out this feature through a Cypriot investment firm, Greenfield Wealth, that it acquired earlier this year.
Why Is this Important?
Kraken believes these new services will cater to the growing demand for “comprehensive offerings within a regulated framework ”among European clients.
Moreover, the newly launched offering provides regulatory clarity for users, ensuring that all derivatives on the Kraken platform are recognized and compliant. Furthermore, it enables European customers to access advanced trading tools on the exchange within a regulated system. Kraken offers flexible collateral options, strong infrastructure, and robust local fiat support, which would help traders manage risk and optimize their capital.
“The launch of Kraken’s regulated derivatives in Europe, the largest offering of its kind, is well-timed to meet this growing demand and underscores our commitment to providing trusted, compliant access to the best markets and trading opportunities,” said Shannon Kurtas, Kraken’s Head of Exchange.
Kurtas explained that derivatives serve European customers by improving access to liquidity as well as ensuring capital efficiency. Kraken will offer its derivatives via Payward Europe Digital Solutions, a Cyprus-based MiFID II-regulated entity.
Kraken Stands Out in a Crowded Market
Interestingly, Kraken’s momentum in crypto derivatives isn’t new. The trading platform has expanded its presence via multiple acquisitions, including a previous purchase of UK-based Crypto Facilities. Kraken also extended its US presence with a $1.5 billion acquisition of NinjaTrader.
These acquisitions have laid the groundwork for the deep liquidity Kraken now offers to other markets, including Europe. Kraken explained that the crypto derivatives offered to European users are not new or untested. Instead, Kurtas explained that “These are existing contracts that have material volume trading on them, and along with that comes established liquidity, better execution costs, and fiat rails for getting collateral in and out efficiently and cheaply.
Crypto Derivatives Record Increased Demand
The crypto derivatives market has seen significant demand lately, with platforms such as Coinbase, Bitstamp, and Gemini making strategic moves. Coinbase recently announced plans to acquire derivatives platform Deribit and hinted at further acquisition plans.
Similarly, Gemini has secured European approval, allowing it to offer crypto derivatives in the EEA. As the competition in the derivatives market intensifies, more crypto platforms will move to secure licenses and approval from European regulators. However, early movers such as Kraken and Coinbase will likely secure significant market share.
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