STS Digital launches organized cryptocurrency platform in collaboration with Kraken as distribution ally.

The platform, which encompasses 400 tokens, targets banks, family offices, and high-net-worth individuals as interest in digital assets from institutional investors increases.

STS Digital launches a new structured products platform. (TyliJura/Pixabay)

Key points:

• STS Digital has unveiled a global structured products platform for institutional investors, offering customized crypto derivatives on 400 digital asset tokens.
• Kraken acts as a distribution partner and is utilizing the platform to enhance its new Dual Investment product, providing eligible clients with fixed returns on bitcoin and ether.

STS Digital, a trading firm that focuses on crypto options, introduced a structured-products platform designed for advanced investors as digital assets increasingly gain traction among conventional financial institutions.

Following a $30 million funding round, the Bermuda-based firm announced that the platform, covering 400 tokens, is intended for banks, family offices, and high-net-worth individuals looking for returns beyond their spot-market holdings. Kraken, the cryptocurrency exchange whose parent company, Payward, participated in the funding, will offer the platform to its partners, as stated by STS Digital in a release to CoinDesk.

The demand for crypto structured products is on the rise as venture funds, portfolio managers, and large mandate holders seek more customized hedging options. Standard leveraged products like futures and perpetuals, with their generalized design, often do not meet specific needs, particularly due to path dependency.

Structured products generally incorporate options that assist in managing volatility and generating additional income on top of spot market holdings. Currently, open interest is about $47 billion, according to TheTie, with the majority concentrated on Deribit.

For Kraken, this partnership also aims to broaden its product offerings. According to the announcement, the exchange is utilizing STS’ derivatives expertise to enhance its Dual Investment product, which was launched earlier this month, allowing eligible clients to earn fixed returns on bitcoin BTC$71,563.91 and ether (ETH).

The collaboration introduces “structured strategies like covered calls to our platform, enhances our expanding suite of derivatives solutions, and provides clients with a new method to generate returns that differs from traditional crypto strategies like staking or lending,” said Alexia Theodorou, director of derivatives at Kraken, in the statement.