Crypto Facilities, which was bought by cryptocurrency exchange Kraken in 2019, is in talks with the U.K.'s Financial Conduct Authority about expanding its service to custody a broader range of client assets, Bloomberg reported on Thursday.

The London-based firm, which offers futures contracts in crypto assets for institutional investors, is in talks to offer futures contracts denominated in the fiat currency it is holding for the client, CEO Mark Jennings told Bloomberg.

This would require an expansion of its multilateral trading license, which it acquired in 2020. Jennings said he expects this process to take between six and 12 months.

"It’s a key driver as we expand out what we do in the institutional market across crypto,” Jennings said.

The firm is looking move into a void in the crypto derivatives market left when FTX collapsed last November.

"Prior to FTX we’d be hitting $700 million to $800 million a day” in trading volume, Jennings said. It is now closer to $100 million, he added.

The total volume in the crypto derivatives market fell to $1.62 trillion in August, a drop of over 12% from the month before and its second-lowest level since 2021, according to data provider CCData.

Neither Kraken nor the FCA immediately responded to CoinDesk's request for further comment.

Read More: Deribit Sees 17% Growth in Crypto Derivatives Trading Volume in August, Led by Options