Kraken Gets MTF License to Allow Futures Trading in UK

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  • Kraken subsidiary Crypto Facilities has been awarded a Multilateral Trading Facility (MTF) license by the UK’s Financial Conduct Authority
  • Crypto Facilities can now offer crypto futures to institutional investors
  • The awarding of the license is the first given to a crypto company in the UK

Kraken has become the first cryptocurrency exchange to be granted a Multilateral Trading Facility (MTF) license by the UK’s Financial Conduct Authority (FCA). Crypto Facilities, the subsidiary of the exchange that offers the services, is now allowed to offer futures products to institutional clients, expanding their reach in the cryptocurrency growing market for finance professionals.

Kraken Can Now Offer Crypto Derivatives in Europe

Kraken announced the news on a blog post in which Jesse Powell, CEO and co-founder of Kraken, praised the options the license now affords them:

We undergo these licensing efforts because Kraken is about making crypto accessible for everyone. This particular license means that a sophisticated class of investors, limited by their own requirements to interface with a regulated venue such as an MTF, will now have access to crypto derivatives in Europe for the first time. More participants means more liquidity and a better experience for everyone.

Crypto Facilities will be the first authorized derivatives marketplace in Europe to offer leveraged trading of cryptocurrencies. Institutional investors are known to prefer leveraged, cash-settled futures contracts as it allows them to have exposure to Bitcoin and other cryptocurrencies without holding or accepting delivery of the product.

Licensing Process Far From Easy

The importance of official licensing cannot be overstated for crypto companies wishing to make serious inroads into the institutional crypto space. There is clearly an appetite for exposure to cryptocurrency trading in the professional finance sector given that the process of obtaining such licenses is a long, drawn out affair.

This was alluded to in our interview with Lykke CEO and founder Richard Olsen, who told us that what was initially supposed to be a nine month process to obtain an Organized Trading Facility (OTF) has so far taken four years. Any company such as Lykke and Kraken willing to go to such lengths must have serious faith in their being a market for what they can offer when they get it.