Deutsche Börse Group bets $200M on Kraken

Since its earliest days, Kraken has hewed more closely to the AnCap libertarian ethos of crypto than just about any other American fintech. San Franciscan Jesse Powell brought the company to life in summer 2011 and by 2013 it presented as an alternative to the friendly AOL style welcome mat of Coinbase.

Now headed by Co-CEOs Dave Ripley and Arjun Sethi, Powell became chairman in 2023 when Powell was subjected to what looks to have been some nasty weaponization of the Justice Department. Powell’s home was searched and the feds confiscated his computers, laptops and cellphones, according to the New York Times. The probe officially ended two years later with no charges, though anyone who’s endured that experience knows the time, terror and expense of being investigated is plenty punitive in its own right.

With things looking up, yesterday it was announced that the Deutsche Börse Group, a Frankfurt-based colossus with 16,000 employees, has invested $200 million for a 1.5 percent stake in Kraken.

Thomas Book, Executive Board Member of Deutsche Börse Group, responsible for Trading and Clearing, told Modern Consensus exclusively: “Kraken is the perfect partner to accelerate what we are building at Deutsche Börse – a market infrastructure that treats traditional securities and digital assets as one. This investment reflects our conviction in both the partnership and the direction of the industry.”

This investment marks a strengthening of a strategic partnership between Deutsche Börse Group and Kraken that was already brewing.

In December, the firms had announced their intention to “leverage their complementary capabilities to bridge traditional financial markets and the digital asset economy.”

Back then, Sethi said, “Our partnership with Deutsche Börse Group demonstrates what happens when two infrastructures designed for scale and trust intersect. By linking traditional and digital markets across a wide range of asset classes, we’re building a holistic foundation for the next generation of financial innovation: defined by efficiency, openness, and client access.”

So this major investment, which values Kraken at over $13 billion, will cover aspects including trading, custody, settlement, collateral management, and tokenized assets, and allow both firms to offer “a new range of enhanced products and services that deliver frictionless access to both ecosystems, creating a holistic experience for institutional clients.”