Kraken has announced the acquisition of Small Exchange, a CFTC-licensed DCM with plans to expand its services in the US.
Top cryptocurrency exchange Kraken has acquired a CFTC-licensed Designated Contract Market (DCM) dubbed Small Exchange. It completed the acquisition with IG Group, for $100 million, laying the foundation for Kraken to launch a fully US-native derivatives venue and product suite. Moreover, it expands the operations of the cryptocurrency exchange in the country.
Kraken Sets Pace for US Derivatives Market
On Oct. 16, Kraken announced that it had acquired Small Exchange, in a move that creates a deep, sophisticated onshore venue in the world’s largest capital market. The company noted that the acquisition is an advancement of its mission to build a unified, high-performance trading environment.
Owning a firm that holds a DCM approval under the oversight of the CFTC provides Kraken with the authorization to design and create markets that are specifically for exchange-listed derivatives in the United States. According to Arjun Sethi, co-CEO of Kraken, the acquisition is designed for scale, transparency, and efficiency.
He also thinks that Kraken has set the pace for a new generation of the US derivatives market, especially because it creates a connection to spot, futures, and margin products, all inside a single regulated liquidity system. The CFTC oversight makes it legal for Kraken to integrate clearing, risk, and matching into one environment.
This is a development that meets the same standards as the largest exchanges in the world. In the long run, the exchange can reduce fragmentation and lower funding latency. More interestingly, it offers onshore the kind of access and performance that only existed offshore.
Kraken Debuts Perps Product and xStocks Service
The acquisition of Small Exchange is one of the several top moves that Kraken has made in recent months. Moreso, it reflects the company’s commitment to expanding its business and meeting the growing demands of its customers.
A month ago, it debuted its “Perps” perpetual trading product, which allows users to invest in cryptocurrency futures via price movement predictions.
In the same September, Kraken rolled out the xStocks service in the greater European market. It allows clients in the region to trade digital versions of popular equities like Tesla and Nvidia. These moves are seen as part of a broader corporate strategy ahead of the exchange’s potential IPO in 2026.
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