Kraken has moved into the world of proprietary trading with the purchase of Breakout, a Florida-based startup that provides traders with access to capital once they prove their skills.
The acquisition is part of the San Francisco exchange’s plan to broaden its trading services as it works towards a public listing.
Breakout, launched in 2023, allows traders who pass a strict evaluation process to control up to $200,000 in notional capital.
Those who succeed can retain as much as 90% of their profits, but must undergo retesting if they breach risk limits.
The platform supports over 50 trading pairs and offers leverage of up to five times on Bitcoin and Ether contracts.
Kraken co-CEO Arjun Sethi said,
“Breakout gives us a way to allocate capital based on proof of skill rather than access to capital itself. In a world that is rapidly shifting from who you know to what you know, we want to build systems that reward demonstrated performance, not pedigree.”
Kraken said the service will eventually be integrated into its advanced trading arm, Kraken Pro, where it will be pitched at professional traders looking to scale up.
The company described the move as part of its commitment to offer “innovative, performance-based products” that allow skilled market participants to trade at size.
Financial terms of the deal have not been disclosed.
Breakout raised $4.5 million in seed funding last year before being acquired.
The purchase is Kraken’s second major acquisition this year.
In May, the exchange announced a $1.5 billion takeover of NinjaTrader, a U.S. futures and trading software platform.
The company has also introduced stock and ETF trading in selected American states as it gears up for an initial public offering expected as early as 2026.
If completed, Kraken would become only the second U.S.-based crypto exchange to trade publicly after Coinbase’s Nasdaq debut in 2021.
Kraken’s expansion comes as digital asset firms face a more accommodating regulatory environment under President Donald Trump’s administration.
In March, the Securities and Exchange Commission dropped long-running enforcement cases against Kraken, Coinbase, Robinhood, Uniswap Labs and OpenSea, ending legal disputes that had cast uncertainty over the sector.
Sethi stated,
“By integrating Breakout into Kraken, we are building an infrastructure layer where traders can earn their way into size, deploy capital with minimal friction, and get paid on merit. [...] Transparent, programmable, and open to anyone with an edge.”
Proprietary trading—where firms allocate their own funds to traders in exchange for a share of profits—has long been a fixture in traditional finance, but was largely limited for U.S. banks after the 2008 financial crisis.
In crypto, firms such as Jump Crypto and Cumberland deploy capital directly, while retail-focused platforms like Breakout have brought the model to individual traders through performance testing.
With Breakout now under Kraken’s wing, the exchange is positioning itself to compete more directly with both institutional trading firms and emerging retail prop platforms.
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