TLDR
- Kraken is first to access STS Digital’s structured product platform via API.
- STS Digital allows structured crypto products with principal protection options.
- Investors can earn yield through options strategies on bitcoin and ethereum.
- STS Digital supports over 400 cryptocurrencies for structured investment products.
- Kraken offers a curated selection of structured products to retail traders.
Kraken has become the first platform to integrate STS Digital’s new structured crypto product platform. The launch gives users access to pre-packaged investment strategies using cryptocurrencies. The announcement was made by STS Digital on March 25.
The new platform allows investors to create structured products combining derivatives and fixed-income-like payoffs. STS Digital aims to provide options-based products with defined returns, catering to both retail and institutional clients.
Structured Products Offer Defined Crypto Payoffs
Structured products are hybrid investment tools that combine derivatives and near-guaranteed returns. STS Digital packages complex strategies into a single product for simplified access.
Maxime Seiler, CEO of STS Digital, explained, “Structured products package options into a simple investment product that gives a defined payout at maturity.” These products allow measured exposure to cryptocurrencies while limiting downside risk.
The offerings include principal-protected notes and yield enhancement notes. Investors may protect a portion of their principal while earning premiums through options. Seiler noted, “Your worst case scenario is losing part of your capital if the market drops, while the rest is protected.”
Kraken Expands Derivatives Offerings
Kraken has integrated STS Digital’s structured products through an API, adding new options strategies to its derivatives ecosystem. The collaboration extends Kraken’s Dual Investment product, which allows predefined returns on bitcoin and ethereum.
The exchange will offer a curated set of structured products rather than fully custom strategies. Seiler said, “Clients can subscribe to a defined set of products and payoffs on the platform.” Kraken launched the integration in select regions through a soft beta about two weeks ago.
The partnership enables Kraken users to access professional-grade crypto instruments previously available mainly to institutional clients. The platform provides multiple revenue channels while managing risk through structured certificates.
STS Digital’s Platform Supports Broad Asset Coverage
STS Digital supports over 400 cryptocurrencies across vanilla and exotic options. The firm plans to expand into tokenized equities, FX, and commodities this year. This expansion allows more types of structured products to be created for investors.
The company operates under Bermuda regulations as a custodian, derivatives exchange, and market maker. STS Digital now employs around 50 people, with plans to hire 20 more. The firm recently secured $30 million in funding led by CMT Digital, with support from Kraken’s parent company, Payward.
The structured product platform is a natural extension of STS Digital’s existing options offerings. It allows automated pricing, design, and trading of investment products for banks, family offices, and high-net-worth clients seeking managed crypto exposure.
