The well-known collateral management and settlement network, ClearLoop, of cryptocurrency custody expert Copper has welcomed Kraken MTF, the exchange’s institution-only derivatives trading division, to its network. Based in London and subject to U.K. regulations by the Financial Conduct Authority (FCA), Kraken MTF was acquired by the exchange approximately five years ago as Crypto Facilities.
The multilateral trading facility offers coin-collateralized futures contracts spanning litecoin (LTC), bitcoin cash (BCH), ether (ETH), bitcoin (BTC), and XRP. It does not serve a retail audience. Alternative frameworks, like in-custody settlement networks, are being pushed after numerous traders’ money became stuck on the defunct cryptocurrency exchange FTX.
According to a press release, hundreds of institutional customers have access to OKX, Bybit, Deribit, BIT, Gate.io, Bitfinex, Bitget, and PowerTrade through Copper’s off-exchange network. Bitstamp and Bitmart are scheduled to launch shortly. “Kraken MTF CEO Mark Jennings stated in an interview that this caters to a certain kind of institutional clientele that seeks third-party custody, particularly with regard to the derivatives they trade.
They can obtain that single access point, meaning a single wallet control, and be able to trade on multiple different venues and net that risk down over four hours.”
Kraken’s Crypto Facilities was trading about $30 billion worth of volume per month prior to the FCA’s prohibition on crypto derivatives for retail consumers going into force in early 2021, according to Jennings. Since then, according to Jennings, “we have used the MTF to continue to grow with our institutional client base.” “At this moment, we are not making that $30 billion a month. But we’re now heading back in that direction, and part of that has involved merging with companies like Copper to get that institutional clientele to the venue. ClearLoop handled 10.6 million trades with a $64.6 billion notional volume in May of this year.