7 hours ago · 3 min read
San Francisco · U.K.› Kraken › Exchanges
Kraken Acquired Derivatives Trading Platform and Index Provider ‘Crypto Facilities’
Kraken announced that it had purchased Crypto Facilities, a regulated cryptocurrencies trading platform and index provider based out of London, in a “nine-figure” acquisition.
Within the last eight hours, Kraken announced its purchase of Crypto Facilities with the intent to become a “global leader in cryptocurrency spot and futures trading.”
Background on Crypto Facilities
Crypto Facilities provides individuals and institutions 24/7 trading for cryptocurrency derivatives, with leverage up to 50x. The firm claims to be the first regulated entity to list futures for Bitcoin (BTC), Ripple’s XRP (XRP), Ethereum (ETH), Litecoin (LTC), and Bitcoin Cash (BCH).
The firm also provides several different indices, including the reference rate used by the Chicago Mercantile Exchange (CME) for its Bitcoin futures. Crypto Facilities is regulated by the Financial Conduct Authority (FCA), the UK equivalent of the SEC—providing substantial credibility to the firm stemming from strong regulatory oversight.
Statements About the Acquisition
Timo Schlaefer, CEO and founder of Crypto Facilities said this about 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.”
Reportedly, Kraken acquired Crypto Facilities to satisfy “client demand for innovative products and services” that complement its exchange and over the counter (OTC) services. Eligible Kraken clients will gain access to futures on the six cryptocurrency pairs mentioned above, providing a “highly efficient way to trade and hedge cryptocurrency.”
In a statement from Kraken’s CEO, Jesse Powell:
“I’m thrilled to welcome the Crypto Facilities team into the Kraken family, 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.”
Powell went on to describe Crypto Facilities as having an “awesome team, awesome product” on Twitter.
Kraken’s Recent Acquisitions
The nine-figure deal is reportedly Kraken’s largest acquisition to date and potentially ranks as one of the largest acquisitions the industry has seen.
Other massive buyouts in crypto include Coinbase’s $120 million acquisition of Balaji Srinivasan’s of Earn.com, Bithumb’s sale for $353 million to BK Global Consortium, and TRON’s purchase of BitTorrent for $140 million.
Some of Kraken’s previous acquisitions include Bitcoin exchange services Coinsetter, Cavirtex, and CleverCoin—wallet funding service Glidera—and multi-exchange charting, trading, and portfolio tracking platform Cryptowatch.
The exact amount paid in the acquisition was undisclosed. However, CryptoSlate has reached out to Kraken and Jesse Powell for further clarification.
Potential Trend for Exchanges
Kraken’s recent acquisition could indicate a larger trend among exchanges. As the crypto trading sector matures, competition between cryptocurrency exchanges will likely intensify. In an effort to fight for market share it seems logical that exchanges will purchase complementary services to augment their offerings.
In this particular industry, there can only be a few winners, and stakes are high with payouts in the billions. Watch out for other big acquisitions in the exchange space.