TLDR
- STS Digital raised $30 million in a round led by CMT Digital.
- Kraken parent Payward and Fidelity affiliate F Prime joined the round.
- Funds will expand spot and crypto options infrastructure.
- STS Digital serves institutions across 400 digital assets.
Kraken, CMT Digital, and Fidelity’s investment arm have backed crypto options platform STS Digital in a $30 million funding round. The investment comes as institutional demand for crypto derivatives continues to grow amid market volatility.
STS Digital, a Bermuda-regulated digital asset trading firm, announced the funding on Thursday. The round was led by CMT Digital and included Payward, the parent company of Kraken. Arrington Capital, BitRock Capital, Strobe Ventures, and Fidelity’s affiliated investment arm F Prime also participated.
$30 Million Round Backed by Major Industry Firms
The funding round was led by CMT Digital, the digital asset arm of trading firm DRW. Payward joined the round as part of Kraken’s broader derivatives strategy. F Prime, which is affiliated with Fidelity, also took part alongside other venture investors.
STS Digital was established in 2022 and focuses on institutional clients. The firm offers trading in spot markets, options, and structured products. It supports more than 400 digital assets through several access channels
Gideon Hyams, chairman and co-founder of STS Digital, said the funding will support growing institutional demand. “This investment enables us to meet the explosive demand from institutional investors for our spot, options, and structured product pricing,” Hyams said.
The company stated that the new capital will strengthen its balance sheet and trading capabilities. It also plans to scale its infrastructure for both spot and options markets.
Focus on Liquidity and Risk Management
STS Digital provides over-the-counter trading and advanced derivatives. These include futures and customized structured solutions designed for sophisticated investors. The firm aims to offer continuous access to markets with low-latency execution.
CMT Digital cited liquidity and platform structure as key factors behind its investment. Sam Hallene, partner at CMT Digital, referred to the company’s position in crypto options markets.
“They have already built a meaningful liquidity moat in crypto options, and our view is that liquidity is one of the most durable competitive advantages in financial markets,” Hallene said.
The company also states that it maintains institutional-grade risk management systems. Market participants have placed greater focus on counterparties with strong financial positions in recent years. This trend has grown following periods of stress in digital asset markets.
Kraken Expands Derivatives Strategy
Kraken’s parent company Payward joined the funding as part of its broader derivatives expansion. The exchange has been increasing its presence in futures and options markets.
Arjun Sethi, chief executive of Payward, commented on the rationale for the investment. “Derivatives are among the most powerful tools in crypto, giving market participants more ways to manage risk and navigate volatility,” Sethi said.
Institutional investors are increasingly using options for hedging and yield strategies. They also rely on derivatives to manage price swings rather than engage only in speculative trades.
STS Digital stated that the capital will be used to enhance liquidity during volatile market conditions. It will also support the development of its spot and options infrastructure.
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