On July 24, the Commodity Futures and Trading Commission (CFTC) announced that it is granting non-action relief to Small Exchange, which owns Kraken, regarding its Select Market policies. This no-action letter will give the platform a flexible opportunity to resume its outbound marketing.
In a letter released on July 24, CFTC staff provided temporary relief from the existing DCM rules on the Small Exchange. Kraken’s parent company, Payward, acquired Small Exchange in late 2025. However, it remained inactive for over a year. Without this relief, it would have remained silent and had to go through a long recovery process.
The passive support will allow Micro Exchanges to list products and resume trading without fear of enforcement if they meet certain conditions and the October 2026 deadline. This will also help Kraken expand its US-based business.
The official statement “The Commodity Futures Trading Commission’s Division of Market Oversight announced today that it has issued a no-action letter to Kraken Derivatives Exchange Inc., formerly Small Exchange Inc., a designated contract market, which involves certain sleep-related strategies.
CFTC Leans In to Kraken’s Inaction Letter as Crypto Regulation Evolves
The passive letter is a big relief for Kraken, which will allow the exchange to use DCM’s existing Small Exchange to offer regulated futures and derivatives easily. This letter will help Kraken expand its work in traditional currencies beyond crypto-based offerings.
Kraken is expanding its reach in various emerging markets, such as tokenized securities. Payward’s xSstocks platform now displays stocks based in Hong Kong, and plans to add UK, European, and South Korean stocks. However, it still needs legal approval. This development comes after its US tokens and aims to provide users with regular access to international markets. It has also partnered with GTN to assist with execution, storage, and record keeping.
Even though Kraken is entering a new market, Kraken’s Federal Reserve master account remains inactive after several months. It is a Federal Reserve master account that has been approved as a digital asset bank. A “thin” minimum account offers direct access to the Fed’s payment system but comes with restrictions. Kraken has been a huge success because of its architecture. However, it is still under legal review.
Arjun Sethi, Co-CEO of Payward and Kraken, said Press release“With the Federal Reserve master account, we can not work as participants in the US bank, but as a financial institution directly related. For the Wyoming SPDI prepared on the model of all reserves, this creates a unique basis of stability. It gives us the power to settle directly on Fedwire, reducing the dependence of correspondent banks on correspondent banks in the cooperative market, such as liquid fiatrate.
The CFTC’s support follows a policy of accommodation for the crypto industry. The agency also issued similar letters in the past on event contracts and exchange reports to facilitate new planning and effective monitoring. These letters come with strict conditions and deadlines, which allow the agency’s staff to monitor results without rushing to new rules.
Earlier this year, CFTC granted a letter of non-action to Bitnomial Exchange, LLC, a designated exchange, and Bitnomial Clearinghouse, LLC, a securities registry.
Kraken, one of the longest running, most liquid and secure cryptocurrency platforms, has launched new contracts on Bitcoin (BTC) and Ether (ETH), giving many professional and institutional clients access to a market share based on digital assets that Kraken hopes to grow economically in the coming years.
On July 16, Kraken revealed the launch of options contracts on Bitcoin (BTC) and Ether (ETH). Alexia Theodorou, Director of Derivatives at Kraken, said “Crypto options are still a small part of traditional markets but the gap is closing as professional and institutional funds continue to migrate to digital assets.”
