TL;DR
- Kraken, a major player in the crypto market, has launched a new division called Kraken Institutional. This division is aimed at serving institutional clients and integrates existing services like spot and over-the-counter trading, along with crypto staking services for clients outside the U.S.
- The new division is set to rival Coinbase Institutional and Binance Institutional, both of which serve institutional investors. Kraken Institutional plans to launch a “qualified custody” service.
- The launch of Kraken Institutional comes at a time when spot Bitcoin ETFs are gaining traction among institutional investors, signifying a major advancement in the crypto industry and demonstrating the growing interest.
Kraken, aiming to establish itself in the Bitcoin ETF market, has launched a new division focused on serving institutional clients. This new entity, known as Kraken Institutional, integrates its existing institutional services, including spot and over-the-counter trading, along with crypto staking services for clients outside the U.S.
The division is primarily designed for asset managers, hedge funds, and wealthy individuals. Tim Ogilvie, the co-founder of Staked, a firm Kraken acquired in December 2021, will head Kraken Institutional. Ogilvie highlighted the swift rise of institutional adoption in the crypto sector, partly due to the recent approval of Bitcoin ETFs, in a statement.
Coinbase, the custodian for eight out of the ten newly launched Bitcoin ETFs, is projected to see significant profits in the upcoming year. With its new division, Kraken plans to rival Coinbase Institutional and Coinbase Prime, both established in 2021 to serve institutional investors.
Kraken Seeks to Compete with Coinbase and Binance in the Institutional Space
Kraken Institutional is set to rival Binance Institutional, a platform that has been providing tailored solutions for institutional clients since its inception in mid-2022. Ogilvie detailed in a blog post that Kraken Institutional plans to launch a “qualified custody” service, supported by Kraken Financial, a Special Purpose Depository Institution chartered in Wyoming.
This move positions Kraken as a trusted custodian for institutional clients looking for dependable storage solutions for their digital assets. Concurrently, the exchange recently filed to dismiss a lawsuit from the Securities and Exchange Commission, arguing that allowing the case to proceed would set a “dangerous precedent”.
In November, the SEC claimed that the parent companies of the exchange were operating Kraken’s crypto trading platform as an unregistered securities exchange, broker, dealer, and clearing agency. Kraken argued in a blog post that allowing this case to continue would set a “dangerous precedent for agency overreach”.
The launch of this new division by Kraken comes at a time when spot Bitcoin ETFs are gaining traction among institutional investors. This move signifies a major advancement in the crypto industry, demonstrating the growing interest and acceptance of digital assets among conventional financial institutions.
