Another prediction market could soon see the light of day in the United States: Kraken.
The Wyoming-based cryptocurrency exchange on Thursday announced a $100 million purchase of Small Exchange, which is registered with the Commodity Futures Trading Commission (CFTC) as a Designated Contracts Market (DCM) and is therefore able to operate as a federally regulated exchange in the United States. Small Exchange belonged to the IG group.
In his release In announcing the acquisition, Kraken said the purchase advances its mission “to design and create markets for publicly traded derivatives products in the United States.” The statement did not specifically address the country’s controversial and increasingly crowded sporting events market. But entry is now a legal possibility for a sprawling platform that is one of the few licensed to sell derivatives in the United States, the United Kingdom and the European Union. Stake has reached out to Kraken for comment regarding its sporting events contract intentions.
The expansion also comes at a time when Trump administration policies have boosted the business of cryptocurrency and prediction markets.
Kraken expansion continues
Kraken co-CEO Arjun Sethi said in a statement that this expanded version of the company is “designed for scale, transparency and efficiency.”
“This step connects spot, futures and margin products into a single regulated liquidity system, thereby reducing fragmentation, reducing funding latency and bringing overseas the type of access and performance that has primarily existed overseas,” he continued. “Under CFTC oversight, Kraken can now integrate clearing, risk and matching in an environment that meets the same standards as the world’s largest exchanges.”
The purchase of the Small Exchange is the latest in a series of machinations intended to expand Kraken’s reach in the U.S. derivatives market. Kraken earlier this year purchased NinjaTrader, a US futures platform, which allowed US-based users to “trade CME-listed cryptocurrency futures, as well as spot cryptocurrencies in a unified interface,” according to the release. Kraken this month expanded its offering of equities, FX indices and commodities contracts.
