Kraken Acquires CFTC-Regulated Small Exchange for $100M

Kraken has acquired Small Exchange from IG Group for $100 million, gaining direct regulatory oversight from the Commodity Futures Trading Commission as the crypto exchange pursues a comprehensive U.S. derivatives strategy.

The deal, announced in a statement today, gives Kraken control of a CFTC-regulated Designated Contract Market, positioning the platform to offer spot, futures, and margin products under unified regulatory supervision. The acquisition represents a strategic shift toward building institutional-grade infrastructure for U.S. clients within domestic regulatory frameworks.

Kraken structured the purchase with $32.5 million in cash and $67.5 million in equity from its parent company Payward. The transaction includes a distribution partnership with IG Group, allowing the British trading platform to continue offering products from the derivatives venue.

"This creates the foundation for a new generation of United States derivatives markets designed for scale, transparency, and efficiency," said Arjun Sethi, co-CEO of Kraken. The executive emphasized that CFTC oversight "reduces fragmentation, lowers funding latency, and brings onshore the kind of access and performance that has mostly existed offshore."

The acquisition arrives as IG Group pivots away from U.S. derivatives operations toward Australian and UK crypto markets. IG recorded a £73.3 million post-tax gain on the sale while strengthening its regulatory capital position. CEO Breon Corcoran characterized the transaction as delivering "a significant return" while enabling continued collaboration with Kraken on crypto product distribution.

IG Group acquired Small Exchange roughly two years ago but has redirected its crypto expansion strategy toward markets where it recently secured regulatory approvals. The firm obtained a cryptoasset license from the UK Financial Conduct Authority in September and announced plans to acquire Australian exchange Independent Reserve for A$178 million .

Earlier this year, IG took part in a new funding round at Zero Hash Holdings, a leading market infrastructure provider for crypto, stablecoin, and tokenized assets valued at $1 billion, leaving it with an 8.1% shareholding.

For Kraken, the Small Exchange purchase complements existing regulated operations in the United Kingdom and European Union. The platform aims to create a consolidated trading hub that brings institutional-level infrastructure to U.S. customers, addressing longstanding concerns about fragmentation in American crypto derivatives markets.