STS Digital launches crypto products powered by Kraken.
Crypto derivatives company STS Digital said on Wednesday it has launched a structured product platform for digital assets, with Kraken as its first distribution partner.
STS said the digital platform enables clients to access options-based strategies packaged into pre-defined payment structures. Kraken is integrating the platform with an API and using it to power its dual investment product, which offers eligible clients fixed returns on Bitcoin (BTC) and Ether (ETH).
The start-up reflects a broader trend of companies packaging derivatives into structured products that can offer yield or lower protection in crypto markets.
Jeremy Domingue, Head of Digital Structured Products at STS, said the launch aims to expand institutional access to complex digital asset investment strategies.
Kraken expands its offerings with structured products
Kraken's Director of Derivatives, Alexia Theodorou, said the partnership will expand the exchange's derivatives portfolio to include structured strategies such as covered calls. She said the products give customers an alternative way to make returns beyond incorporating or lending.
“This collaboration reflects our commitment to deliver flexible and innovative products that help customers engage with digital assets in sophisticated ways,” she said.
In the year The company said the funding will help expand its crypto options trading platform and institutional market reach.
How structured crypto products work
DBS, which will launch tokenized structured notes on Ethereum in 2025, defines structured products as financial instruments whose performance or value is linked to an underlying asset, commodity or index. Simply put, they bundle derivatives into a product that offers pre-determined payments based on how the underlying asset performs.
Based on STS Digital, the platform offers structured investment strategies including options-based products aimed at generating yield and managing exposure to digital assets.
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The STS platform operates under the license of the Bermuda Monetary Authority and places it within a regulated framework for clients.
While the platform is regulated, structured products can be complex and carry risks associated with volatility, liquidity and associated exposure, especially in more mature markets like crypto.
Companies expand crypto investment offerings for institutions
The launch comes as companies ramp up efforts to introduce more sophisticated crypto investment products, including tokenized notes, product structures and other derivatives-related offerings.
On Tuesday, Omnes and Apex Group announced plans to launch the Omnes Mining Note (OMN), an institutional-grade structured note linked to the Bitcoin hashrate. The note gives institutional investors direct economic exposure to the new Bitcoin product.
Earlier in the day, Lombard, which builds bitcoin-based lending infrastructure, announced that it would partner with Bitwise Asset Management to help fund bitcoin production and lending for institutional protection.
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