Bitcoin exchange Kraken has announced it has purchased Coinsetter in what amounts to one of the larger mergers of notable brands in the bitcoin ecosystem.
As a result of the undisclosed deal, Kraken’s exchange will now be available in 37 US states as well as all 10 Canadian provinces. Coinsetter had previously acquired Canadian bitcoin exchange CAVirtex in April, months after it would close citing security concerns.
The sale of New York-based Coinsetter, rumored for months, follows an influx of new and well-capitalized entrants in the US bitcoin exchange market, which has seen startups such as Coinbase, Gemini and itBit launch regulated services from New York. Long a platform for institutional traders, Coinsetter raised just over $2m since its founding in 2012, the most recent $1.26m round coming at the end of 2014.
For Kraken, the acquisition comes six months after the San Francisco startup revealed it would not apply for a ‘BitLicense’ to operate in New York state, and nearly two years after it first halted US deposits due to issues with domestic banking partners.
Since leaving the US in 2014, Kraken has become the leader in the EUR/BTC market. According to data from Kaiko, Kraken posted more than 6,000 BTC in EUR/BTC volume on 17th January, at a time when competing exchanges BTC-e, Coinbase and itBit recorded 856 BTC, 512 BTC and 49 BTC in volume, respectively.
In statements, Kraken CEO Jesse Powell sought to frame the acquisition as one that would bolster the exchange's credentials as it seeks to compete in the global market.
“The consolidation of these three veteran giants is the largest exchange deal to date. Combined, we represent over thirteen years of bitcoin exchange experience in an industry that is only seven years old. Kraken has big, exciting plans for 2016.”
As part of the deal, client accounts on CAVirtex and Coinsetter will be migrated to Kraken’s platform on 26th January. Two undisclosed employees will be absorbed by Kraken as part of the deal.
Disclaimer: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Coinsetter and Kraken.
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