STS Digital unveils structured crypto platform with Kraken as distribution partner

STS Digital, a trading firm specializing in crypto options, unveiled a structured-products platform aimed at sophisticated investors as digital assets gain growing acceptance among traditional financial institutions.

One month after raising $30 million, the Bermuda-based company said the platform, which covers 400 tokens, is aimed at banks, family offices, and high-net-worth individuals seeking returns on top of their spot-market holdings. Kraken, the crypto exchange whose parent, Payward, took part in the fundraising, will offer the platform to its partners, STS Digital said in a statement shared with CoinDesk.

Crypto structured products are seeing rising demand as venture funds, portfolio managers and large mandate holders look for more tailored hedging solutions. Standard leveraged products like futures and perpetuals, with their one-size-fits-all design, often fall short, especially due to path dependency.

Structured products typically embed options that help navigate volatility and generate additional income on top of spot market holdings. Open interest is currently around $47 billion, according to TheTie, with the lion’s share on Deribit.

For Kraken, the partnership is also about deepening its bench of products. According to the release, the exchange is leveraging STS' derivatives expertise to power its Dual Investment product, introduced earlier this month, to allow eligible clients to earn fixed returns on bitcoin BTC$71,460.68 and ether (ETH).

The agreement brings "structured strategies like covered calls to our platform, strengthens our growing suite of derivatives solutions and gives clients a new way to generate return that’s distinct from traditional crypto approaches like staking or lending," Alexia Theodorou, director of derivatives at Kraken, said in the statement.