Kraken’s Subsidiary Becomes the First Licensed Derivatives Platform to Offer Leveraged Crypto in the EU

Sarah Tran  Jul 07, 2020 10:25  UTC 02:25

2 Min Read

Kraken Futures, a subsidiary of Kraken, also known as Crypto Facilities, has announced it had been granted a Multilateral Trading Facility (MTF) license from the United Kingdom’s Financial Conduct Authority (FCA). 

Kraken is the largest cryptocurrency exchange in Europe in terms of trading volume in euro, and its subsidiary has become the first cryptocurrency firm to obtain this type of license. 

Crypto Facilities was acquired by Kraken in February 2019, and provides futures contracts in Bitcoin (BTC), Ether (ETH), Ripple (XRP), Bitcoin Cash (BCH), and Litecoin (LTC), with up to 50 times leverage. 

After obtaining the MTF license from the FCA, Crypto Facilities would be able to expand its product range for its institutional clients who are restricted to trade only on licensed platforms. 

This news marks Kraken’s Crypto Facilities as the first and only licensed derivatives platform to offer exposure to leveraged cryptocurrencies in the European Union. Jesse Powell, CEO and Co-founder Kraken said in a statement:

“We undergo these licensing efforts because Kraken is about making crypto accessible for everyone. This particular license means that a sophisticated class of investors, limited by their own requirements to interface with a regulated venue such as an MTF, will not have access to crypto derivatives in Europe for the first time. More participants means more liquidity and a better experience for everyone.”

A Multilateral Trading Facility is a term used for trading systems that facilitate the exchange of financial products between different parties in Europe. However, with the Brexit deal still in negotiation, it has not been made clear how regulatory licensing will be treated for after the event.

Swiss InCore Bank offers banking services to Kraken’s clients

Switzerland’s InCore Bank AG has become the first bank in the country to offer banking services to Kraken’s clients, using Single Euro Payments Area (SEPA) deposits. SEPA was designed to simplify euro bank transfers.

Under the current uncertain macroeconomic climate, the companies announced that institutions and traders have been seeking alternative sources of capital value during this time.


Image source: Susan Yin via Unsplash

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