Kraken Acquires Small Exchange to Build Onshore Derivatives Hub
The cryptocurrency exchange Kraken announced that it has acquired the Small Exchange for $100 million from IG Group. This move is the foundation for Kraken to launch a comprehensive suite of U.S.-native derivatives products. The acquisition of the Small Exchange, a Designated Contract Market (DCM) regulated by the Commodity Futures Trading Commission (CFTC), allows Kraken to create a sophisticated onshore trading venue for derivatives in the American market.
Regulatory Core for U.S. Derivatives
The Small Exchange’s status as a CFTC-regulated DCM is central to Kraken’s strategy. This regulatory status is required for Kraken to design and operate markets for exchange-traded derivatives in the United States.
Co-CEO Arjun Sethi stated this step connects spot, futures, and margin products within a single regulated liquidity system.
The integrated structure is designed to reduce market fragmentation and lower funding latency. This process aims to bring the market efficiency currently found mainly offshore to the U.S. market.
Sethi noted that under CFTC oversight, Kraken can now integrate clearing, risk management, and order matching in one environment. This structure meets the same compliance standards as the world’s largest global exchanges.
Strategic Infrastructure Growth
The Small Exchange purchase is part of Kraken’s larger plan to build global infrastructure. The firm now operates regulated derivatives trading venues in the United Kingdom, the European Union, and the United States.
This latest acquisition follows a series of other strategic moves into the derivatives space. Earlier in 2025, Kraken acquired NinjaTrader, a leading U.S. futures platform.
This allowed U.S. clients to trade CME-listed crypto futures alongside spot crypto. In October 2025, the NinjaTrader offering expanded to include contracts on equities, FX indices, and commodities like oil and gold.
These acquisitions, along with the 2019 purchase of the UK-regulated Crypto Facilities, highlight Kraken’s focus on the regulated derivatives sector.
Targeting Market Efficiency
The Small Exchange was originally designed to bridge the gap between equities and futures for retail investors. The exchange offers small, standardized, and simple products intended to make capital-efficient risk management more accessible. Its product lineup includes futures on broad-based equity indices, precious metals, and foreign exchange.
This product focus aligns with Kraken’s goal to build a “new generation of United States derivatives markets” focused on scale, transparency, and efficiency. Kraken aims to eliminate capital inefficiency that has long restricted U.S. traders.
The acquisition’s financial impact is immediate. The $1.755 billion in value created from Kraken’s initial $10 million investment in FanDuel puts the firm in a position to execute on this growth strategy.
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