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Payward, the operator of the Kraken cryptocurrency exchange, has finalized its acquisition of the Chicago-based crypto derivatives exchange Bitnomial, securing three licenses for trading derivatives in the United States.
The specific details of the transaction remain undisclosed; however, Payward previously indicated that the total could reach up to $550 million in cash and stock, based on an estimated valuation of the acquired firm at $20 billion. This acquisition will enable Payward to obtain three licenses from the U.S. Commodity Futures Trading Commission (CFTC). These include:
Registration as a Futures Commission Merchant (FCM), allowing the trading of futures and options contracts on cryptocurrencies, accepting deposits, and providing leverage.
A license for operating a designated contract market (DCM) for futures, options, and swaps.
Registration as a Derivatives Clearing Organization (DCO). This license permits the company to act as a counterparty and ensure the execution of transactions involving crypto derivatives.
Consequently, Payward will be able to manage the exchange, conduct clearing of transactions, and offer regulated brokerage services. Bitnomial spent over a decade obtaining these approvals. According to Payward’s management, no other U.S. crypto company possesses all three of these licenses.
Payward and Kraken’s CEO Arjun Sethi stated that the company will begin by implementing spot margin trading on Kraken, with plans to later introduce perpetual contracts and options. These will be accessible to U.S. clients on both Kraken and NinjaTrader platforms. The Bitnomial platform will continue to operate under Payward’s structure, retaining its licenses and business relationships with third parties.
In 2024, Bitnomial filed a lawsuit against the U.S. Securities and Exchange Commission (SEC), asserting that the futures traded on its platform for the cryptocurrency XRP do not qualify as securities futures.
