for early access to the latest igaming videos!
and get the latest igaming news first!
Kraken might be making a move into the fast-growing but controversial US prediction market after announcing its acquisition of Small Exchange for $100 million yesterday.
This platform is already registered with the Commodity Futures Trading Commission (CFTC) as a designated contract market (DCM), granting it the authority to operate a federally regulated exchange in the United States.
This license positions Kraken to potentially rival existing players like Polymarket and Kalshi, especially as interest in prediction markets continues to grow. Small Exchange was previously owned by IG Group.
While Kraken has not disclosed specific plans regarding sports betting opportunities, it’s worth noting that existing platforms in this space are currently under scrutiny in various states.
“New generation of United States derivatives markets”
Kraken views its acquisition of Small Exchange as a pivotal move towards establishing a new era in US derivatives markets. The company stated that the deal “advances our mission to build a unified, high-performance trading environment,” emphasizing that the DCM license empowers them to create and manage markets for exchange-listed derivatives under the CFTC’s oversight.
Co-CEO Arjun Sethi highlighted the significance of this step, saying, “Kraken’s acquisition of a CFTC-regulated Designated Contract Market creates the foundation for a new generation of United States derivatives markets.”
He pointed out that the system is designed for scale, transparency, and efficiency, aiming to streamline Kraken’s trading products.
Sethi further explained the broader vision: “This step connects spot, futures and margin products inside a single regulated liquidity system, reducing fragmentation, lowering funding latency and bringing onshore the kind of access and performance that has mostly existed offshore.”
With the CFTC’s oversight, Kraken can now seamlessly “integrate clearing, risk and matching into one environment that meets the same standards as the largest exchanges in the world.”
Kraken now covers three major regions
With its acquisition of Small Exchange, Kraken has expanded its reach to three key regions, complementing its existing regulated derivatives venues in the UK and the European Union. This move allows Kraken to facilitate trading across six fiat currencies and over 450 digital and traditional assets.
“Together, these elements create a network that moves collateral in real time, nets exposure across jurisdictions, and reduces capital inefficiencies that have long held back US traders,” Sethi said. “This is not about marketing or narrative. It is about building better market structure.”
This acquisition follows Kraken’s strategic initiatives in the US futures market. Earlier this year, the company purchased NinjaTrader, a well-known futures platform that enables clients to trade CME-listed crypto futures alongside spot crypto. In October, Kraken broadened this platform to include equities, FX indices, and commodities such as oil and gold.
Additionally, Kraken acquired Crypto Facilities in 2019, a UK trading platform regulated by the Financial Conduct Authority. This venue now serves as the foundation for what Kraken claims is Europe’s largest regulated crypto futures market under MiFID II rules.
“By securing the necessary licensing and infrastructure today,” the company said, “we are laying the groundwork for institutional-grade markets as crypto matures.”
Source: ReadWrite
