Kraken Becomes First Major Crypto Exchange to Enter Proprietary Trading Through Breakout Acquisition

The move represents a significant shift in how crypto exchanges operate and how skilled traders can access capital.

The acquisition allows qualified traders to access up to $200,000 in trading capital without risking their own money. After passing rigorous evaluations, traders can keep up to 90% of their profits, which are paid directly on-demand. Financial terms of the deal were not disclosed, though Breakout had previously raised $4.5 million in seed funding in 2024.

Breakout operates on a performance-based model that focuses on skill rather than wealth. Traders must first purchase and pass a rigorous evaluation that tests their risk management abilities and strategy consistency. The company offers both 1-step and 2-step challenges with no time limits, giving traders flexibility to prove their abilities.

The evaluation process includes strict risk management rules. Traders face maximum drawdowns of 6% for 1-step accounts and 8% for 2-step models. Daily loss limits and position size restrictions ensure both the firm and traders stay within safe parameters.

Since launching in 2023, Breakout has issued over 20,000 funded accounts with zero payout delays across all market conditions. Account sizes range from $5,000 to $100,000, with the potential to scale up to $2 million for top performers.

What sets this acquisition apart is the quality of trading infrastructure. Breakout sources liquidity directly from Tier 1 centralized exchanges, creating what industry experts believe is the first implementation of institutional-grade exchange liquidity for an evaluation-based crypto product.

Source: @krakenfx

Traders gain access to over 50 cryptocurrency pairs with institutional-grade liquidity. Bitcoin and Ethereum contracts offer up to 5x leverage, while other digital assets are capped at 2x leverage. The platform supports advanced order types and provides real-time risk management tools.

The integration with Kraken’s infrastructure brings additional benefits. Kraken has achieved baseline round-trip latency of about 2.5ms, representing over a 97% improvement since Q1 2021. This technical excellence ensures traders can execute strategies with minimal delays and slippage.

This acquisition fits into Kraken’s broader expansion strategy. The company previously acquired NinjaTrader for $1.5 billion in May 2025, entering the US futures market. It also bought Capitalise.ai to add automated trading capabilities to its platform.

The timing appears strategic given the current regulatory environment. The crypto industry operates under more favorable conditions following the 2024 US presidential election, with the new administration showing strong support for digital assets.

The broader cryptocurrency market provides a supportive backdrop for this expansion. Industry data shows the global crypto market reached $2.96 trillion in 2025 and projects growth to $7.98 trillion by 2030. Search interest in prop trading firms has surged 900% year-over-year since 2022, indicating growing demand for these services.

Arjun Sethi, co-CEO of Kraken, explained the acquisition’s philosophy: “Breakout gives us a way to allocate capital based on proof of skill rather than access to capital itself. In a world that is rapidly shifting from who you know to what you know, we want to build systems that reward demonstrated performance, not pedigree.”

This approach democratizes access to substantial trading capital. Traditional prop trading often requires significant personal wealth or industry connections. Breakout’s model removes these barriers, focusing purely on trading ability and risk management skills.

The company has designed its evaluation program to verify real market decision-making under pressure. Unlike simulation-based testing, traders work with actual market conditions and live price feeds. This ensures that successful candidates can handle the psychological and technical demands of trading with significant capital.

Kraken plans to integrate Breakout directly into the Kraken Pro platform over time. This will create a unified ecosystem where traders can manage proprietary trading alongside spot trading, futures, staking, and other crypto services.

The integration promises several advantages for users. Traders will benefit from Kraken’s global regulatory licenses, security standards, and market connectivity. The combined platform will offer instant funding between different trading accounts and streamlined settlement processes.

Breakout’s co-founder and CEO Alex Miningham highlighted the partnership’s potential: “Together, both companies form a unified ecosystem that supports the full trader journey from education through independent capital deployment.”

The company also offers scaling opportunities for successful traders. Every three months, traders who meet specific performance criteria can increase their account balance by 25% and earn higher profit splits, potentially reaching 95% for top performers.

This acquisition positions Kraken uniquely in the competitive crypto exchange landscape. While competitors focus on traditional exchange services, Kraken now offers a comprehensive trading ecosystem that combines spot trading, futures, and proprietary trading under one platform.

For the thousands of crypto traders seeking access to larger capital pools, this development creates new opportunities to scale their strategies without personal financial risk. The combination of Kraken’s infrastructure with Breakout’s evaluation model establishes a new standard for skill-based capital allocation in cryptocurrency markets.