Kraken Acquires Coinsetter and Cavirtex in Bold Push Into North American Bitcoin Markets

On January 19, 2016, Kraken, the San Francisco-based bitcoin exchange and the world’s largest EUR-denominated BTC trading platform, announced the acquisition of two prominent North American exchanges — Coinsetter, a New York-based bitcoin exchange, and Cavirtex, Canada’s first and historically highest-volume bitcoin exchange. The move marks a significant consolidation in the cryptocurrency exchange landscape and signals Kraken’s determination to capture North American market share.

TL;DR

• Kraken acquires Coinsetter (US) and Cavirtex (Canada) to expand into North American markets
• Kraken was the largest EUR bitcoin exchange, but 97.8% of its volume came from EUR/BTC pairs
• Partnership with SynapsePay enables $5 USD deposits in 37 US states and Washington D.C.
• Client accounts from both exchanges will be migrated to Kraken by January 26
• Kraken has not applied for a New York BitLicense, limiting its operations in the state
• Bitcoin trading at approximately $380 at the time of the acquisition

The acquisition is a strategic move to address Kraken’s most glaring weakness: despite being the dominant EUR-denominated bitcoin exchange globally, the platform had struggled to attract meaningful USD trading volume. According to data from Bitcoinity, a staggering 97.8 percent of Kraken’s 30-day bitcoin transaction volume came from EUR/BTC orders, with less than 2 percent from USD/BTC pairs. Until now, American users who wanted to trade on Kraken had to transfer funds to a Luxembourg-based account, incurring international wire transfer fees in the process.

The Acquisition Details

Kraken will fully absorb both the Coinsetter and Cavirtex brands in the acquisition. Client accounts from both exchanges will be automatically transferred to Kraken’s platform, with the migration scheduled to complete by January 26. The deal terms were not disclosed.

Coinsetter, based in New York, had itself acquired Cavirtex in April 2015, making this Kraken deal a consolidation of two previously merged entities. Cavirtex held the distinction of being Canada’s first bitcoin exchange and maintained the country’s highest historical trading volume.

Kraken CEO Jesse Powell described Coinsetter as having “a lot of synergies” with Kraken and noted the platform was “pretty clean” — a reference to the regulatory and operational due diligence that accompanied the acquisition. In a related deal, Kraken also announced a partnership with American payment provider SynapsePay to enable rapid, low-fee domestic USD deposits and withdrawals for individual and institutional clients.

Bridging the USD Gap With SynapsePay

Buying Coinsetter addresses only part of Kraken’s North American challenge. The exchange also needs to make it easier for American users to deposit US dollars directly onto the platform. The SynapsePay partnership allows USD deposits in 37 US states and Washington D.C. for a flat $5 fee — a dramatic improvement over the international wire transfer requirements that previously kept most American traders away.

However, Kraken’s North American expansion comes with one notable gap. The company has not applied for a BitLicense in the state of New York, meaning it cannot legally operate in one of the world’s most important financial centers. Whether Kraken will eventually seek the controversial license remains an open question.

Industry Consolidation Accelerates

The acquisition reflects a broader trend of consolidation in the cryptocurrency exchange industry. As bitcoin trading at roughly $380 per coin with a total market capitalization of approximately $5.74 billion, the ecosystem is still relatively small compared to traditional financial markets. Exchanges are increasingly seeking scale through mergers and acquisitions rather than organic growth alone.

For Coinsetter’s existing clients, the migration to Kraken brings access to a larger, more liquid platform with advanced trading features including margin trading and dark pool capabilities. For Kraken, the deal instantly adds a North American user base that would have taken years to build organically.

What Comes Next

The acquisition sets the stage for an aggressive year of growth for Kraken. In the weeks following this deal, Kraken would go on to raise a multi-million dollar Series B round led by SBI Investment, one of Japan’s leading venture capital firms, and receive additional investment from Money Partners Group, a major Tokyo-based foreign exchange brokerage. By June, Kraken would set a new volume record with nearly 100,000 BTC traded in 24 hours — a 264 percent increase over its previous record.

For the broader bitcoin ecosystem, Kraken’s North American expansion represents a maturing of the exchange infrastructure. As platforms consolidate and professionalize, the barriers to entry for mainstream users continue to lower — even as regulatory frameworks like New York’s BitLicense create new complications.

Why This Matters

This acquisition was a pivotal moment in the professionalization of cryptocurrency exchanges. At a time when Bitcoin was still trading under $400 and the concept of institutional-grade crypto trading was barely a glimmer, Kraken was building the infrastructure that would eventually support billions in daily volume. The Coinsetter and Cavirtex acquisitions gave Kraken an instant foothold in the US and Canadian markets without the slow grind of building from scratch. Combined with the SynapsePay partnership for easy USD deposits, the deal laid the groundwork for the kind of compliant, accessible exchange infrastructure that would later attract institutional capital. The BitLicense question — whether to comply or avoid New York entirely — would become a defining strategic challenge for every major exchange in the years that followed.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Past performance is not indicative of future results.