Another prediction market could soon be released in the United States: Kraken.
The Wyoming-based cryptocurrency exchange on Thursday announced a $100 million purchase of Small Exchange, which is registered with the Commodity Futures Trading Commission (CFTC) as a designated contract market (DCM) and is therefore able to operate as a federally regulated exchange in the U.S. Small Exchange was owned by IG Group.
In its release announcing the acquisition, Kraken said the purchase advances its mission “to design and create markets for exchange-listed derivatives in the U.S.” The release did not specifically address the country’s contentious and increasingly crowded sports event marketplace. But entrance is now a legal possibility for a sprawling platform that is one of few licensed to sell derivatives in the U.S., United Kingdom, and European Union. InGame has contacted Kraken for comment regarding its sports event contract intentions.
The expansion also comes at a time when amenable Trump Administration policies have stoked business for cryptocurrency and prediction markets.
Kraken expansion continues
Kraken co-CEO Arjun Sethi said in a release that this expanded version of the company is “designed for scale, transparency, and efficiency.”
“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,” he continued. “Under CFTC oversight, Kraken can now integrate clearing, risk, and matching into one environment that meets the same standards as the largest exchanges in the world.”
The Small Exchange purchase is the latest in a series of machinations designed to expand Kraken’s reach into the U.S. derivatives market. Kraken earlier this year bought NinjaTrader, a U.S. futures platform, which allowed U.S.-based users to “trade CME-listed cryptocurrency futures, alongside spot crypto in a unified interface,” according to the release. Kraken expanded its contract offerings in equities, FX indices, and commodities this month.
