Kraken Acquires Futures Startup In Deal Worth At Least $100 Million

Cryptocurrency exchange services provider Kraken has officially acquired regulated futures trading startup Crypto Facilities in an undisclosed deal valued at least $100 million.

Announced Monday, the "Nine-figure" acquisition, the largest seen in the industry so far in 2019, will enable Kraken customers to trade spot, as well as open positions offering exposure to the future price movements of cryptocurrencies, all through a unified trading interface.

Kraken CEO Jesse Powell framed the merger as one that would "Massively accelerate" his company's roadmap, enabling the San Francisco-based startup to sidestep years of efforts to obtain the licenses and approvals necessary to offer a competing service in Europe.

In addition to offering cash-settled futures trading for bitcoin, bitcoin cash, XRP, litecoin and ether trading pairs, Crypto Facilities notably provides data to the CME CF Bitcoin Reference Rate, an index created in collaboration with CME Group and that powers that entity's U.S. futures offering, a relationship that will continue following the acquisition.

"The deal brings our total developer team to over 100, and will accelerate Crypto Facilities by enabling us to add more assets. We plan to launch more contracts in the medium-term and Kraken also has plans to launch more assets."

Crypto Facilities CEO Timo Schlaefer will continue on at Kraken following the exit, retaining his title of CEO. The firm will remain an independent entity within the larger Kraken Group, the exchange's umbrella company.

Looking forward, Powell added that he hopes the merger will help Kraken better compete within an increasingly competitive global exchange landscape.

Powell and Schlaefer also stressed the benefits futures trading would bring for customers, as they will now be able to trade futures on nights and weekends, extending beyond the 9-to-5 trading hours of current U.S.-based offerings.

In conversation, Powell also spoke in more detail about how he believes the merger will position Kraken in what over the past few years has become a more competitive market for companies that provide consumers with the means to buy and sell cryptocurrencies.

Still, Powell expects the product, the only available futures offering for cryptocurrencies currently in Europe, to help Kraken continue to differentiate from the pack.