Key Points
Kraken Introduces Institutional Division
Kraken, a crypto exchange, has announced the launch of Kraken Institutional.
This new division is designed to provide specialized services to institutional clients.
The launch, which took place on Feb. 27, is part of Kraken’s strategy to secure a significant position in the Bitcoin exchange-traded fund (ETF) market.
Kraken Institutional brings together the exchange’s existing institutional services.
These services include spot and over-the-counter trading, as well as crypto staking for clients based outside the United States.
The division is designed to cater to asset managers, hedge funds, and high-net-worth individuals.
Tim Ogilvie, who joined Kraken after the acquisition of Staked in December 2021, has been appointed to lead the new division.
Ogilvie has noted the rapid pace of institutional adoption in the cryptocurrency sector.
He attributes part of this growth to the recent approval of Bitcoin ETFs.
Ogilvie states that institutional adoption of crypto is “growing rapidly”.
He also notes that “recent ETF approval” has spurred broader institutional demand.
January saw the launch of nine Bitcoin ETFs which attracted significant attention.
They brought in an aggregate inflow of $6 billion, translating to an average daily inflow of $196 million.
These ETFs also set a new daily volume record with $2.4 billion.
Despite outflows experienced by Grayscale’s ETF, others, particularly those managed by BlackRock and Fidelity, have seen substantial inflows.
Coinbase, which acts as the custodian for eight of the ten newly launched Bitcoin ETFs, is expected to see significant earnings growth.
Kraken’s institutional services division aims to compete with Coinbase Institutional and Coinbase Prime.
It also aims to compete with Binance Institutional, which offers tailored solutions for a similar clientele.
Kraken Institutional plans to introduce a “qualified custody” service.
This service will be supported by Kraken Financial, a Wyoming-chartered Special Purpose Depository Institution.
The service is part of Kraken’s broader effort to expand its offerings and compete more effectively in the institutional market segment.
The launch of Kraken Institutional comes amidst a recent twist in the legal saga between Kraken and the U.S. Securities and Exchange Commission (SEC).
The Chamber of Digital Commerce has intervened in the dispute by filing an amicus curiae brief in support of Kraken.
This move challenges the SEC’s approach to regulating the digital asset industry.
The brief argues against the SEC’s efforts to enforce regulations without clear legislative authority.
It emphasizes the need for a regulatory framework that fosters innovation while protecting investor interests.
The Chamber of Digital Commerce’s filing expresses concerns over the SEC’s broad application of securities laws to digital asset transactions.
It asserts that such an approach is legally flawed.
The trade body warns that the SEC’s aggressive enforcement actions could hinder the growth and adoption of blockchain technology.
This could potentially impact the digital asset market and the broader U.S. economy.
