Kraken Adopts STS Digital Structured Products to Broaden Cryptocurrency Trading Options

TLDR

• Kraken becomes the initial platform to integrate STS Digital’s structured product platform through an API.
• STS Digital facilitates structured crypto products that include principal protection features.
• Investors have the opportunity to generate yield by employing options strategies involving Bitcoin and Ethereum.
• STS Digital’s platform accommodates more than 400 cryptocurrencies for structured investment offerings.
• Kraken provides a carefully selected range of structured products to its retail trading clientele.

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(SeaPRwire) –   Kraken has achieved the distinction of being the inaugural platform to incorporate STS Digital’s recently introduced structured crypto product platform. This integration grants users entry to pre-assembled investment strategies leveraging cryptocurrencies. STS Digital formally announced this development on March 25.

This innovative platform empowers investors to construct structured products that merge derivatives with returns akin to fixed income. STS Digital’s objective is to deliver options-centric products featuring predetermined returns, serving both individual and institutional investors.

Structured Products Offer Defined Crypto Payoffs

Structured products represent hybrid investment instruments that merge derivatives with returns that are nearly assured. STS Digital streamlines intricate strategies into a singular product, thereby simplifying access.

Maxime Seiler, CEO of STS Digital, clarified, saying, “Structured products consolidate options into an uncomplicated investment product that delivers a predetermined payout upon maturity.” Such products enable controlled exposure to cryptocurrencies while simultaneously mitigating potential downside risk.

The available offerings encompass principal-protected notes and yield enhancement notes. Investors have the option to safeguard a segment of their principal while generating premiums via options. Seiler remarked, “The most unfavorable outcome involves losing a portion of your capital if the market declines, with the remainder being protected.”

Kraken Expands Derivatives Offerings

Kraken has incorporated STS Digital’s structured products via an API, thereby introducing novel options strategies to its derivatives ecosystem. This partnership enhances Kraken’s existing Dual Investment product, which facilitates predetermined returns on Bitcoin and Ethereum.

The exchange intends to provide a carefully selected collection of structured products, as opposed to entirely customized strategies. Seiler stated, “Clients are able to subscribe to a specific array of products and payoffs available on the platform.” Kraken initiated this integration in certain regions through a soft beta release approximately two weeks prior.

This collaboration empowers Kraken users to access professional-caliber crypto instruments that were previously largely confined to institutional clients. The platform establishes various revenue streams while simultaneously managing risk through structured certificates.

STS Digital’s Platform Supports Broad Asset Coverage

STS Digital supports more than 400 cryptocurrencies, covering both standard (‘vanilla’) and complex (‘exotic’) options. The company intends to broaden its scope to include tokenized equities, foreign exchange (FX), and commodities within the current year. This expansion will facilitate the creation of a wider variety of structured products for investors.

Operating under Bermuda’s regulatory framework, the company functions as a custodian, derivatives exchange, and market maker. STS Digital currently employs approximately 50 individuals, with intentions to recruit an additional 20. The firm recently secured $30 million in funding, spearheaded by CMT Digital, and received backing from Payward, Kraken’s parent company.

The structured product platform represents a logical progression from STS Digital’s current options offerings. It enables the automated pricing, design, and trading of investment products for financial institutions, family offices, and high-net-worth individuals who are looking for managed exposure to cryptocurrencies.