Crypto Facilities Acquired by Kraken, But Will Continue to Be Under FCA Surveillance
Considering the euro volume and liquidity, Kraken is presently the largest Bitcoin exchange in the world, giving them plenty of capital to move around. To broaden their business opportunities, the company has chosen to purchase Crypto Facilities, an exchange in London that primarily offers derivatives trading services, while acting as an index provider.
The purchase costs hundreds of millions of dollars, according to an official announcement from Kraken.
Presently, Crypto Facilities falls under the regulation of the UK’s Financial Conduct Authority, since it is based in London. Even though this purchase puts it under Kraken’s supervision, the platform will still be obligated to follow those regulations. Crypto Facilities was the first platform under any regulations to take on Bitcoin, Ethereum, XRP, Litecoin, and Bitcoin Cash futures.
In a statement from CEO Timoo Schlaefer on behalf of Crypto Facilities, he said,
“It has been our mission to build the most sophisticated, powerful and user-friendly cryptocurrency trading platform. Teaming up with Kraken allows us to innovate the next generation of products and tremendously boosts the value we are able to provide to our clients.”
By buying out Crypto Facilities, Kraken now has the option to start their own market for futures trading of the aforementioned crypto assets. Soon, all eligible Kraken customers will have access to this market, though Kraken is still in the process of integrating the back-end operations for their purchase, based on reports by Forbes.
Unfortunately, the US customers for Kraken will be ineligible to participate in the futures market. CEO of Kraken, Jesse Powell, said,
“I’m thrilled to welcome the Crypto Facilities team into the Kraken family. We are excited to introduce eligible clients to these industry leading futures and index products. Over the coming months, our teams will continue to enhance and expand these offerings. We’ve got great stuff in store for traders and institutional clients in 2019.”
The news did not take long to post to Reddit. One Redditor commented on how this changes what Kraken offers, saying,
“If more liquidity flows into the paper copy (a.k.a derivative) of the spot asset, that is demand chasing the fiat copy and not pushing up the real asset. Kraken is thus essentially becoming another on ramp for the fiat copy, making it easier for capital to flow away from underlying real tokens.”
Right now, the exact amount has not been published for the acquisition. However, it is supposedly the largest acquisition to have been closed. Along with Crypto Facilities, Kraken has also acquired Coinsetter, Cavirtex, and CleverCoin.
All three of the platforms have been major Bitcoin exchanges, while they have also acquired Glidera and Crypto Watch.