Kraken’s Derivatives Arm Joins Copper’s Crypto Settlement Network

• Kraken MTF offers coin-collateralized futures contracts across bitcoin, ETH, XRP, litecoin and bitcoin cash.
• ClearLoop provides off-exchange connectivity via single wallet access to OKX, Bybit, Deribit, BIT, Gate.io, Bitfinex, Bitget and PowerTrade, with Bitstamp and Bitmart soon to go live.

Kraken MTF, the cryptocurrency exchange’s institution-only derivatives trading arm, has joined crypto custody specialist Copper’s popular collateral management and settlement network, ClearLoop.

Kraken MTF, bought as Crypto Facilities by the exchange some five years ago, is based in London and regulated by the U.K.’s Financial Conduct Authority (FCA). The multilateral trading facility, which does not cater to a retail audience, offers coin-collateralized futures contracts across bitcoin BTC$88,353, ether ETH$1,614, XRP, litecoin LTC$78 and bitcoin cash BCH$345.

After many traders' funds were marooned on the collapsed crypto exchange FTX, there’s been a push toward alternative structures, such as in-custody settlement networks and the like. Copper’s off-exchange network provides hundreds of institutional customers with connectivity to OKX, Bybit, Deribit, BIT, Gate.io, Bitfinex, Bitget and PowerTrade, with Bitstamp and Bitmart soon to go live, according to a press release.

“This plays to a certain type of institutional client base that wants third-party custody, and specifically around the derivatives they are trading, they are able to get that single access point, so a single wallet control and to be able to trade on various different venues and net that risk down over four hours,” Kraken MTF CEO Mark Jennings said in an interview.

Before the FCA’s ban on crypto derivatives for retail customers took effect in early 2021, Kraken’s Crypto Facilities was trading around $30 billion worth of volume a month, Jennings said.

“We have since used the MTF to continue to grow with our institutional client base,” Jennings said. “We are not at that $30 billion a month at this point in time. However, we're now moving back towards that, and part of it has been bringing that institutional client base to the venue by integrating with the likes of Copper.”

In May of this year, ClearLoop processed 10.6 million trades with a notional volume of $64.6 billion.