Category Archives: Crypto Facilities

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Kraken Closes $13.5 Million Financing for New Investment Platform

Crypto exchange Kraken has secured USD 13.5 million in a financing round for its proposed online investment platform called Bnk To The Future (BF).

According to the exchange, it was its most successful funding round by individual donors, with over 2,200 participants recorded. BF co-founder Simon Dixon said that this was part of its efforts to achieve a valuation over USD 4 billion to fund new acquisitions.

Its last acquisitions were US market data and trading company CryptoWatch, and London-based derivatives and futures trading platform Crypto Facilities, and it now boasts over USD 85 billion in annual trading volume (2018) from over 4 million customers across the world, making it one of the busiest exchanges of its kind.

Its ambitions are now to expand to provide additional financial services and products for the crypto sector, primarily through BF’s creation of a Special Purpose Vehicle for Kraken to receive illiquid investment in the form of investor equity. This pools all individuals to represent them as a single investor, bypassing SEC’s requirement that would otherwise have required they register under the 1934 Securities and Exchange Act as a public company.

Effectively, this means none of them is a shareholder in Kraken and will only see returns if the exchange lists through an IPO, or is bought over, or has its management bought out. BF spokespersons noted: “This is a high risk high returns platform – please understand this before investing.”

An investor email also stated::

“CryptoWatch Premium membership, the ability to leverage shares for margin collateral, priority service from our client support team, invitation to Kraken’s exclusive investor chat room, subscription to Kraken’s Daily Hash newsletter and OTC Daily report, bi-annual Kraken investor update, beta access to new Kraken products and features, limited edition Kraken swag, [and] 5% investment rebate in KFEE.”

Kraken originally looked for USD 10.2 million but market interest prompted them to increase that figure. Dixon did say that some 250 bank wires were pending and would take the total to USD 14 million.

 

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Kraken Acquires Crypto Facilities in “Nine-Figure” Deal

Crypto Exchange Kraken Acquires Crypto Facilities In a 'Nine-Figure' Deal

In a report yesterday by news outlet Fortune, San Francisco-based cryptocurrency exchange Kraken made an M&A move towards British trading firm Crypto Facilities in a “nine-figure” deal, a reassuring gesture of the coming of high-profile investors into the crypto space.

Recently, Bitcoin News reported on how an expected full-fledged institution uptake has slowed down, most likely due to regulatory and infrastructural shortcomings. However, “institutional investment” clauses continue to pool millions of US dollars into the cryptocurrency market, as revealed by more frequent mergers and acquisitions (M&A).

According to Kraken CEO Jesse Powell, the deal had been in the works for about 10 months and was only awaiting approval from UK’s financial regulator, the Financial Conduct Authority (FCA).

Kraken, which is currently on the cusp of a USD 100 million funding round from its larger customers made up of accredited investors, has made this move in order to provide trading facilities for institutional clients. Although it made it clear that this service will not be available to the US customer base.

At press time, Kraken is #43 on a 24-hour volume rankings of exchanges and has seen over USD 42 million trading volume in the past 24 hours from 72 trading pairs, according to CoinMarketCap data. The acquisition move means Kraken has positioned itself to be the first cryptocurrency exchange with both a spot and futures trading service in Bitcoin, Ethereum, and Ripple, making it a one-stop shop for crypto trading and derivatives.

The report further highlights other acquisitions made in the past by the exchange to include smaller exchanges, crypto research, and digital wallet firms. This achievement puts it on par with other exchanges to include Binance and Coinbase looking to scale up operations for the prospective market.

The previous year saw quite a number of acquisitions and mergers such as BitGo’s acquisition of the Kingdom Trust Company as well as Kingdom Services to provide institutional clients with regulated custodial services. Early this year, Intercontinental Exchange’s Bakkt said it had acquired certain assets of Rosenthal Collins Group (RCG), an independent futures commission merchant.

The recent spike in mergers and acquisitions brings back memories from the age of the internet boom, which saw an instrumental bear market that reshaped the industry. Smaller companies were being absorbed by larger corporations and the consolidation of internet firms solidified the place of infotech in today’s economy.

Perhaps, similar occurrences await the crypto boom and bust as with the early internet days, and if so, there’s a fierce competition for the future-grade blockchain and cryptocurrency market – which so far, paints a picture with institutional investors being pivotal to that reality.

 

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