We may be in a crypto winter, but this isn’t slowing down Kraken crypto exchange. The San Francisco-based firm announced today that it had acquired Crypto Facilities in a deal worth at least $100 million. This is its largest acquisition to date. Crypto Facilities is a leading crypto derivatives provider and was the first regulated entity to offer crypto futures. The acquisition will give Kraken the opportunity to offer crypto derivatives to its four million users.
Raises $100M, Valued at $4 Billion
Kraken may not be the largest crypto exchange in the U.S, but it has always made its presence and influence felt. It has dominated the safest and most secure crypto exchange rankings in the world severally in the past. It’s also the largest crypto exchange globally in euro volume and liquidity.
The acquisition wasn’t the only significant announcement the firm made today. Kraken also revealed that it had raised $100 million from accredited investors. In a move away from convention, the exchange didn’t raise the money from the venture capitalists who have been its financial backers all along.
Kraken raised the funds from some of its larger customers who purchased a stake in the firm. This new group of investors are accredited, and thus Kraken didn’t have to register the round with the Securities and Exchanges Commission. However, despite media requests, Kraken didn’t disclose the identity of the new group of investors. It did, however, disclose that the new funding round values the firm at an incredible $4 billion. This is half the $8 billion Coinbase valuation during its last funding round in October last year.
As the exchange’s CEO revealed, the move was well thought out. Speaking to Fortune, the eccentric Jesse Powell explained that this was in a bid to get the users to become part of the company. In his usual blatant way, he explained:
My personal philosophy is that shareholders are at often at odds with users’ interests. Look at Facebook looting from their users in order to pay off shareholders—that wouldn’t happen if users were shareholders themselves. It’s good to keep interests aligned.
Reinventing to Survive the Winter
With the acquisition, Kraken will be able to offer crypto futures to its clients almost immediately. However, its U.S clients will not be eligible for this feature as there are several regulatory hurdles to smoothen out first. Crypto Facilities offers Bitcoin, Ethereum, XRP, Bitcoin Cash and Litecoin. The two firms will hit the ground running immediately, with Powell revealing that Kraken has already integrated the back-end operations of Crypto Facilities. The acquisition has been in the works for the past ten months, Powell further revealed.
Kraken will add 20 developers based in London from the Crypto Facilities team. The CEO and founder, Timo Schlaefer will retain his position in charge of the derivatives platform. And he couldn’t be more excited about the completion of the deal, he said, further adding:
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
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