Kraken Breaks Ground: UK Pros Can Now Trade Crypto Derivatives—Regulators Grudgingly Nod Along

Kraken just flipped the switch on crypto derivatives for UK professionals—because what’s finance without a little leveraged chaos?

The FSA-approved move lets institutional players gamble—sorry, ’hedge’—with Bitcoin and Ethereum futures. Because nothing screams ’mature market’ like betting on volatility with 20x leverage.

Bonus jab: Traders can now lose money faster than a Brexit negotiation unravels. Cheers to ’innovation.’

Kraken powers UK derivatives trading through its MTF platform

According to Theodorou, the swift growth is the reason why the platform is doubling down on derivatives. Given the accelerating interest from institutional clients and the broader market trends, this represents a significant investment for the firm in the UK. The head of derivatives says expanding access to their flagship product in a key market is a major milestone.

Kraken’s UK derivatives offering is facilitated through the Kraken Multilateral Trading Facility (MTF), a regulated platform operated by Crypto Facilities, which was acquired by Kraken in 2019 in a deal exceeding $100 million.

Crypto Facilities became the first crypto firm to obtain an MTF license from the FCA in 2020. Clients will access the product via Kraken’s Bermuda-based futures broker.

Kraken’s derivatives suite includes a range of advanced products, such as multi-collateral perpetual contracts—an offering it pioneered in the crypto space.

Kraken doubles down on derivatives as institutional demand grows

Theodorou notes that these contracts are a highly capital-efficient trading tool for institutional clients. They allow traders to use various forms of collateral and apply leverage while also enabling them to experiment with more advanced spot trading strategies, such as hedging or other market-neutral approaches.

According to the official, crypto derivatives are still in the early stages of development. In contrast, equity markets typically see derivatives trading volumes that are 10 to 15 times higher than spot markets. Much of the lag in crypto derivatives adoption stems from fragmented regulatory frameworks around the world, which have so far limited Kraken’s access to major markets like the U.S., South Korea, and parts of Europe.

Theodorou explained that while the spot crypto market is only now beginning to see regulatory clarity through frameworks like MiCA and similar efforts globally, derivatives have long been under strict regulatory oversight. She noted that offering these products requires specific licenses tailored to each jurisdiction.

Kraken has taken steps to expand its global derivatives presence, recently acquiring a MiFID II-regulated entity in Cyprus and U.S.-based NinjaTrader. These moves are part of the exchange’s broader strategy to scale its derivatives offering across new markets. The company has also diversified its services by launching U.S. equities trading on both its mobile and web platforms.

Theodorou added that it comes down to prioritizing which jurisdictions they want to target next as the platform continues rolling out this regulated product through our licensing initiatives.

Kraken, which is reportedly preparing for a public listing, generated $1.5 billion in revenue in 2024. The platform recently ventured into the stock trading scene. 

The company recently announced that American users would soon be able to trade over 11,000 stocks and ETFs without paying commissions.

The Securities and Exchange Commission officially dropped its lawsuit against Kraken last month, following similar dismissals in cases against Robinhood and Coinbase. At the time, Kraken called it the “wasteful, politically motivated campaign” against the crypto industry.

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