Kraken In Search of $1 Billion In Debt Financing Deal: Bloomberg

American digital currency trading platform Kraken is seeking up to $1 billion in debt financing amid a business expansion drive. According to a Bloomberg report, the crypto exchange plans to raise this money ahead of its planned Initial Public Offering (IPO).

The Kraken $1 Billion Deal

As the Bloomberg report detailed, Kraken Exchange is working with Goldman Sachs and JPMorgan Chase in the push for debt financing. According to people familiar with fundraising, these megabanks are also in talks with smaller financial firms as direct lenders.

While the initial target is pegged at $1 billion, Bloomberg sources noted that Kraken could raise as little as $200 million. Any funds secured will not be used for operational or in-house needs.

Meanwhile, many crypto experts say this move shows Kraken plans to strengthen its position in the crypto market. This comes after the exchange announced plans to buy NinjaTrader, a retail futures trading platform, for $1.5 billion. 

The deal would allow Kraken to expand into more asset classes and attract more users. Others suggest this strategy will also help the company prepare for future growth opportunities.

Kraken Exchange and the US SEC Lawsuit

Notably, In November 2023, the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Kraken. The regulator alleged at the time that the exchange operated as an unregistered securities platform. 

However, this month, the US SEC dropped its lawsuit against Kraken. This dismissal involved no admission of wrongdoing, no penalties, and no changes to Kraken’s business operations. 

It is important to add that this development shows a broader shift towards a more crypto-friendly regulatory environment under President Donald Trump’s administration. 

Since the appointment of American attorney and politician Mark Uyeda as the security agency’s acting chairman, many crypto exchanges have seen their cases with the SEC either paused or dismissed. 

As reported by CoinGape, Consensys and the U.S. Securities and Exchange Commission (SEC) agreed in principle to dismiss the enforcement case concerning MetaMask. 

Crypto Firms and IPO Push

Analysts believe the $1 billion fundraising push is the time for the exchange to push for its IPO drive. Meanwhile, Kraken is not the only digital asset firm eyeing public listing opportunities. Per earlier reports, Circle Internet Financial, the issuer of USDC stablecoin, has filed for an IPO in the United States. 

eToro is also preparing for a U.S. listing with a reported valuation of $5 billion. Bullish Global and Gemini are also eyeing an IPO this year.

The increasing number of crypto firms seeking IPOs highlights a growing push for institutional acceptance as regulations become clearer.