Kraken unlocks crypto collateral for derivatives across the EU

Crypto exchange Kraken has enabled traders in the European Union to post cryptocurrencies as collateral on its MiFID-regulated derivatives platform, according to Director of Derivatives Alexia Theodorou. This expansion follows Kraken's May launch of derivatives trading across the EU. Initially, due to the lack of a regulated European crypto custodian and the pending Markets in Crypto-Assets (MiCA) regulations, Kraken could not offer crypto collateral under the European regime. The new offering, which involves using its Irish entity for custody and its UK venue for global liquidity, aims to solidify Kraken's position as having the largest European perpetual offering. European traders can now post crypto collateral within a MiFID-regulated framework, with risk managed via haircuts based on collateral volatility. Kraken also uniquely margins crypto collateral "back to the dollar" for calculations. The exchange anticipates this regulated option will attract significant interest, particularly from institutional crypto-native clients.

(Source：The Block)