Kraken Enables Crypto Collateral Trading Under EU’s MiFID Framework
Move integrates MiCA-licensed entities across Ireland, Cyprus, and the UK to streamline liquidity and regulation.
Kraken has become the first major crypto exchange in the European Union to allow traders to post digital assets as collateral on its MiFID-regulated derivatives platform, deepening its compliance footprint across the bloc and enhancing capital efficiency for institutional and retail clients alike.
Regulated Crypto Collateral Comes to Europe
Crypto exchange Kraken now allows EU clients to post cryptocurrencies, including BTC, ETH, and select stablecoins, as collateral for futures trading, following approval under the Markets in Financial Instruments Directive (MiFID) and Markets in Crypto-Assets (MiCA) regimes.
The new feature expands on Kraken’s May 2025 rollout of derivatives trading for European users, which initially supported only fiat collateral. The exchange worked closely with regulators, notably the Cyprus Securities and Exchange Commission (CySEC), the European Securities and Markets Authority (ESMA), and the Central Bank of Ireland, to classify perpetual futures contracts and ensure compliance with regional capital standards.
“When we launched under MiFID, there was no regulated crypto custodian live under MiCA,” said Alexia Theodorou, Kraken’s Director of Derivatives. “Now, the framework enables clients to unlock crypto’s capital efficiency within a fully regulated environment.”
Cross-Border Integration Strengthens Liquidity
The update connects Kraken’s MiCA-licensed Irish entity (custody), MiFID-regulated Cyprus operation (trading), and UK-authorized Multilateral Trading Facility (MTF) into a unified structure. This allows European clients to access global liquidity pools without fragmenting positions between EU and non-EU venues, a first for a regulated crypto derivatives platform.
Collateral posted on the platform will face volatility-based haircuts, with all margin calculations standardized in USD. This provides a consistent risk management model aligned with MiFID’s prudential requirements.
Institutional Demand Drives the Shift
According to Theodorou, institutional traders had long sought crypto-collateralized margining to avoid constant fiat conversions and related fees. Direct use of BTC and ETH now enables faster execution, lower friction, and efficient hedging across more than 150 perpetual futures markets on Kraken Pro.
This development mirrors broader institutional interest in regulated crypto derivatives, which now account for over 95% of global crypto trading volume.
Regulated Innovation Gains Ground
Kraken’s integration of crypto collateral within MiFID and MiCA standards represents a milestone for Europe’s evolving digital-asset infrastructure. The move bridges the gap between traditional finance-grade regulation and on-chain capital efficiency, setting a precedent for exchanges seeking regulatory clarity and competitive access.
As Europe’s crypto policy landscape matures, Kraken’s unified structure could become a blueprint for compliant derivatives trading across the continent.
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