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Quick take:
Once traders pass the evaluation, they will be able to trade crypto using funded accounts without using personal funds.
The acquisition makes Kraken the first crypto exchange platform to enter the proprietary trading space.
In July 2024, Breakout raised $4.5 million in a seed funding round backed by RockawayX, Mechanism Capital, IOBC Capital, C² Ventures, and Round13 Capital.
Kraken announced on Thursday that it has acquired the crypto-native proprietary trading firm Breakout. The acquisition makes Kraken the first crypto exchange platform to enter the prop trading space.
According to the announcement, Kraken users will be able to develop strategies across 50+ crypto pairs with up to 5x leverage on BTC and ETH. Once traders pass the evaluation, they will be able to trade crypto using funded accounts without using personal funds.
The crypto exchange company plans to integrate Breakout to the Kraken Pro platform for eligible users. The company said the acquisition is part of its goal of enabling experienced traders to deploy capital in crypto markets. They will be able to access up to $200,000 in notional capital.
Commenting on the announcement, Arjun Sethi, co-CEO of Kraken, said: “Breakout gives us a way to allocate capital based on proof of skill rather than access to capital itself. In a world that is rapidly shifting from who you know to what you know, we want to build systems that reward demonstrated performance, not pedigree.”
To qualify for a funded account, traders must purchase and pass an evaluation and maintain performance above set drawdown limits.
This is not Kraken’s first major acquisition that is geared towards expanding the company’s business strategy. Earlier this year, it acquired futures trading platform NinjaTrader in a deal reportedly worth $1.5 billion.
The company has also recently entered into a partnership with Backed Finance to roll out tokenised US stocks trading under the xStocks product.
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