Kraken Acquires Small Exchange for $100 Million Under CFTC Regulation
Date: 2025-10-17 Author: Gabriel Deangelo Categories: BUSINESS
Cryptocurrency exchange Kraken announced the completion of its acquisition of Small Exchange, a Commodity Futures Trading Commission (CFTC)-regulated derivatives platform formerly owned by IG Group. The acquisition is valued at $100 million. This move aims to create a fully-fledged derivatives platform in the US, allowing Kraken to strengthen its position in the world's largest financial market.
The acquisition of Small Exchange will form the basis for the implementation of a native derivatives product suite that will complement Kraken's existing trading ecosystem. By achieving Designated Contract Market (DCM) status, the exchange will be able to develop and market new regulated derivatives instruments, ensuring transparency and trading efficiency.
Arjun Sethi, Kraken's co-CEO, emphasized the strategic significance of the deal: "Acquiring a CFTC-regulated venue creates the foundation for a new generation of derivatives markets in the US. Our goal is to unite spot, futures, and margin products into a single regulated liquidity system, which will reduce fragmentation and speed up funding."
The integration of clearing, risk management, and matching will allow Kraken to operate to the same standards as the world's largest exchanges. According to Sethi, the company is building a global infrastructure with regulated venues in the UK, EU, and US, which ensures the efficient movement of capital in real time and reduces restrictions for US traders. "This isn't a marketing ploy—it's about creating an optimal market structure," he noted.
Earlier, in February 2025, Kraken received authorization to operate in the EU financial instruments markets, and in June, it received a MiCA license from the Central Bank of Ireland. Furthermore, since March, the exchange has operated as an electronic money institution (EMI) under FCA supervision in the UK.
Kraken's series of acquisitions in the US derivatives market demonstrates its long-term strategy. In 2019, the exchange acquired Crypto Facilities, an FCA-regulated company, and in early 2025, it acquired NinjaTrader, a US-based futures trading platform, integrating cryptocurrency futures and spot assets into a single interface.
Kraken is building an ecosystem where various financial instruments are united within a single regulated environment. The exchange has raised $500 million at a $15 billion valuation and plans a new funding round of up to $300 million at a $20 billion valuation, confirming its commitment to large-scale development and strengthening its institutional infrastructure.
