Kraken Expands Regulated Crypto-Collateralised Derivatives Offering in Europe
Kraken has announced a significant expansion of its regulated derivatives services across the European Union, enabling traders to use Bitcoin, Ethereum, and approved stablecoins as collateral for perpetual futures on Kraken Pro. This feature applies to more than 150 perpetual futures markets and marks a major step forward for the exchange under the Markets in Crypto-Assets (MiCA) framework.
Operating Within Regulatory Oversight
The exchange functions under the MiCA and MiFID II regulations, with oversight from the Central Bank of Ireland and the Cyprus Securities and Exchange Commission. Kraken’s custody arrangements fully comply with MiFID II, ensuring comprehensive investor protection in line with European law.
One of the first licensed exchanges in Europe to support crypto-collateralised derivatives, Kraken’s move announced on 3 November strengthens its position in Europe’s digital asset market. By allowing clients to post crypto assets instead of converting them into fiat, Kraken offers faster access to liquidity while maintaining strict regulatory compliance.
Crypto as Margin on Kraken Pro
European traders can now use Bitcoin, Ethereum, or select stablecoins as margin across more than 150 perpetual futures markets on Kraken Pro. Collateral is converted into USD for liquidation and margin calculations, standardising risk management while preserving crypto exposure.
To manage price volatility, Kraken employs volatility-based margin haircuts. This risk management approach allows traders to access up to 10x leverage using crypto collateral, reflecting the exchange’s commitment to combining capital efficiency with regulatory compliance.
Aligning with Europe’s Digital Asset Regulations
Kraken’s expansion comes at a pivotal time as the EU tightens oversight of crypto products and promotes innovation through consistent regulatory frameworks. By offering crypto-collateralised futures under direct supervision, Kraken positions itself at the forefront of compliant derivatives trading within Europe.
This integration benefits both institutional and retail traders who seek efficient and legally sound ways to trade leveraged crypto products. Hedge funds and corporate treasuries can now operate within clear regulatory limits, signaling the maturation of Europe’s digital derivatives market.
Enhancing Europe’s Financial Infrastructure
The introduction of transparent liquidation procedures and regulated custody standards aligns digital asset trading with traditional financial norms. These measures help reduce risks and improve trust across the market.
As other licensed exchanges adopt similar offerings, the European Union is poised to become a global hub for compliant digital asset trading, fostering a regulated, sustainable, and competitive digital economy.
Strong Growth Underpins Expansion
Kraken’s announcement follows a robust third-quarter performance, with revenue rising by 50% to $648 million—a growth driven by increased trading volumes and new product integrations after acquiring NinjaTrader, a futures and forex trading platform.
This momentum underscores Kraken’s capacity to grow while maintaining high regulatory standards. By embedding compliance into its core strategy, Kraken is building credibility and scale in an increasingly regulated market environment.
Looking Ahead
As MiCA regulations continue to roll out fully by 2025, exchanges prioritizing both innovation and compliance are expected to attract greater institutional interest. Kraken’s integration of crypto collateral into a regulated derivatives framework exemplifies how digital assets can securely function within Europe’s financial system.
This development signals a shift from speculative trading toward a more structured, transparent market where participant protection is paramount. For the European Union, it represents meaningful progress toward establishing a regulated, sustainable, and globally competitive digital asset economy.
https://coinjournal.net/news/kraken-expands-regulated-derivatives-in-europe-with-bitcoin-and-ethereum-collateral/
