Kraken, a San Francisco-based crypto exchange, has acquired Breakout, a proprietary trading platform that enables funded accounts and leveraged trading services. This means traders can deploy capital based on skill rather than personal funds.
Breakout offers experienced traders with capital access of up to $200,000 in notional capital, with an option to retain up to 90% of the profits generated. To be added to the capital pool, traders must pass a thorough evaluation and maintain a specific performance above predefined limits. The platform features over 50 crypto trading pairs with up to five times leverage on BTC and Ether contracts.
Kraken to start prop trading, allocating capital based on proof of skill
Arjun Sethi, Kraken’s co-CEO, revealed that the acquisition offers them a way to allocate capital based on proof of skill, unlike having access to capital alone. He added that the world is shifting from who you know to what you know, and it’s therefore necessary for them to develop systems that reward demonstrated performance rather than pedigree.
Sethi highlighted that the acquisition of Breakout allows traders to access an infrastructure where they can earn their way into size, deploy capital with minimal friction, and get paid on merit.
The acquisition follows Kraken’s recent purchase of NinjaTrader, a U.S.-based futures and trading platform. The acquisition was completed for $1.5 billion, aligning with Kraken’s goal of going public next year. Cryptopolitan reported that the purchase gave Kraken direct access to regulated U.S. futures markets through NinjaTrader’s status as a Futures Commission Merchant (FCM).
According to Bloomberg, Kraken is also preparing for its IPO in 2026. The listing is expected to happen in the first two quarters of 2026, although the exchange has not revealed the specific timeline yet. The firm, however, confirmed via a response that, to be more transparent with the business after disclosing the 2024 financial highlights, the firm will pursue public markets as it makes sense for its clients, partners, and shareholders.
The acquisition comes amid a favorable political climate, with Trump’s pro-crypto policies easing crypto regulatory frameworks. In March, the SEC dropped a lawsuit against Kraken that alleged the exchange acted as an unregulated exchange. The crypto exchange revealed that the lawsuit was concluded without admitting wrongdoing, penalties, or changes to its business operations.
Kraken’s partnership creates a performance-based path for aspiring traders
Alex Miningham, co-founder and CEO of Breakout, highlighted that his firm offers traders a performance-based starting point. He noted that Kraken delivers the scale and tools to grow, forming a unified ecosystem that supports the complete trader journey from education to independent capital delivery.
Proprietary (prop) trading involves using company funds rather than personal funds, with profits shared between the trader and the firm. U.S banks discouraged prop trading following the 2008 financial crisis, but the model has recently gained traction through firms like Jump Crypto and DRW’s Cumberland alongside Breakout.
The San Francisco-based exchange platform also introduced stock trading and ETFs in select states across the U.S. It also introduced a crypto futures platform through Kraken Derivatives U.S., allowing Americans to trade on CME-listed BTC and ETH contracts alongside spot crypto assets on Kraken Pro.
DailyForex highlighted the current prop traders in the market who may pose competition to Kraken. Firms such as Hola Prime, PipFarm, Rebels funding, Goat Funded Trader, and FTMO each offer unique advantages in the prop trading market. They offer fast withdrawals, scalability, and profit shares that may go to 100% in favour of the trader. Many operate with demo accounts for training and assessing trader experience, while some provide a career path toward salaried trading roles.
The sector poses a challenge for new entrants such as Kraken, while it remains largely unregulated, meaning possible scams may arise. Investors are urged to tread cautiously, using key evaluation factors such as reputation, platform support, trading costs, and internal risk controls.
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