Kraken deploys regulated crypto derivatives traded in Europe and complies with the European Union’s Financial Instruments Directive (MIFID II).
Crypto Exchange’s permanent, fixed maturity futures contracts will be available to retail and institutional customers in the European Economic Area (EEA), the company said Tuesday.
Permission to trade crypto derivatives was made through a Cypriot investment company called Greenfield Wealth. Greenfield Wells has secured the exchange a license from the Cyprus Securities and Exchange Commission (CYSEC), which it acquired earlier this year.
Crypto Derivatives Space has seen several important moves recently. Large players like US listing Coinbase (Coin) have acquired major trading platform Deribit. In Europe, replacements such as BitStamp and Gemini are folded, but the MiFID II license held by the FTX EU is obtained through a backpack.
Kraken also acquired the Crypto facility, a UK FCA-regulated Crypto futures platform in 2019, as well as the $1.5 billion Ninjatrader to promote derivatives trading in the US.
Kraken’s combined approach means that European clients can command relatively large quantities of relatively large quantities, according to Kraken’s head Shannon Kurtas.
“This does not provide access to new trading venues or new contracts,” Cartus said in an interview. “These are existing contracts with material volume transactions in them, resulting in established liquidity, better execution costs, and Fiat Rails to get in and out of collateral efficiently and cheaply.”
Kurtas said the recent introduction of Kraken’s embedded Crypto Connectivity application will also allow European neobanks and fintechs to provide derivatives and spots to their clients.
Picking up licenses in smaller, undoubtedly lighter jurisdictions like Cyprus and Malta is a well-trapped path for crypto companies with deep pockets.
“The lighter ones are probably fair features,” Cartus said. “We also had a set of companies that were established, especially in the CFD space. This has traditionally provided retail access to Forex derivatives and CFDs, so there is a link between individuals, businesses and know-how in these areas of product.”
