Kraken, CMT Digital and Fidelity arm to invest in crypto options platform STS Digital

STS Digital, a Bermuda-based digital asset trading firm, has raised $30 million in a round led by CMT Digital for institutional clients, according to a Thursday announcement.

Paymentward, the parent company of exchange operator Kraken, also participated along with Arrington Capital, Bitrock Capital, Strobe Ventures and Fidelity's affiliate investment arm F-Prime.

Founded in 2022, STS Digital offers over 400 digital assets in spot markets, options and structured products across multiple access channels.

The fresh capital will be used to enhance the firm's position and alternative infrastructure, provide liquidity in volatile market conditions and strengthen its financial position.

“This investment allows us to meet the demand from institutional investors for space, options and structured product pricing,” said Gideon Hymes, the company's chairman and co-founder.

STS Digital supports OTC trading with solutions such as futures and verbally structured solutions designed for sophisticated investors. The platform aims to provide continuous market access with low-latency performance and institutional-level risk management capabilities.

Sam Hallen, partner at CMT Digital, cited the company's risk management and platform design as key factors in the investment decision.

“They've already built a meaningful wave of liquidity in crypto options, and our view is that liquidity is one of the most sustainable competitive advantages in financial markets,” Hale said.

Arjun Sethi, CEO of Payward, noted that the investment is in line with Kraken's efforts to expand its offerings.

“Variables are among the most powerful tools in crypto, giving market participants additional ways to manage risk and explore volatility,” Sethi said.

Recent growth comes as institutional participants shift from speculative trading to hedging, yield generation and volatility management options.

Market observers have pointed to a growing demand for partners with strong balance sheets and consistent execution capabilities, particularly after a period of heightened tension in digital asset markets.