STS Digital & Kraken Launch New Structured Crypto Platform

• STS Digital has launched a new structured-products platform covering 400 different tokens following a recent $30 million funding round.
• The platform is designed for institutional clients, including banks, family offices, and high-net-worth individuals looking to maximize returns on spot holdings.
• Kraken will serve as a primary distribution partner, integrating STS Digital's derivatives technology into its own suite of investment products.

Targeting Institutional Demand

Bermuda-based STS Digital is expanding its footprint in the cryptocurrency market by introducing a specialized platform for structured products. This move comes just one month after the firm successfully raised $30 million in capital. The initiative focuses on providing sophisticated investors with tools to manage volatility and generate yield across more than 400 digital assets. Unlike traditional futures or perpetual contracts, these structured solutions use embedded options to offer more customized hedging strategies that are often preferred by institutional portfolio managers.

Strategic Partnership with Kraken

A core component of this launch is the collaboration with Kraken, the global crypto exchange. Kraken's parent company, Payward, was a participant in STS Digital's recent funding round, solidifying the relationship between the two entities. Under this agreement, Kraken will leverage STS Digital's expertise in derivatives to power its Dual Investment product. This offering allows eligible users to earn fixed returns on major assets like Bitcoin (BTC) and Ethereum (ETH), moving beyond standard methods such as staking or lending.

Evolution of the Crypto Derivatives Market

The demand for structured products is rising as the crypto market matures and traditional financial institutions increase their exposure. Currently, the open interest for crypto options stands at approximately $47 billion, with the majority of activity concentrated on the Deribit exchange. According to Alexia Theodorou, Kraken's director of derivatives, integrating these strategies allows the exchange to provide solutions like covered calls, offering clients distinct ways to generate returns that differ from traditional interest-bearing crypto accounts.