Kraken Exchange Enters the World of Prop Trading. Clients Will Be Able to Trade “Without Risking Their Own Funds”

One of the largest cryptocurrency platforms, Kraken, announced the acquisition of Breakout, an online prop trading company. This makes it the world’s first cryptocurrency exchange to offer clients so-called funded accounts.

Kraken acquires Breakout and shares its infrastructure with them

Funded Accounts allow traders to access more trading capital after passing a test, known in the industry as a “challenge.”

For example, to gain access to a $10,000 account on Breakout, a trader first pays an initial fee (called an evaluation fee) of $100 (in the two-tier model). Then, in the first tier, the trader’s goal is to generate a 5% profit ($500) over an unlimited period of time without losing more than 8% of their capital. Once this goal is achieved, the second tier aims to generate a 10% profit. All this while accessing over 50 cryptocurrency pairs and using leverage of up to 5:1.

Big news 💥

Kraken 🤝 @Breakoutprop = a new path for elite crypto traders.

✅ Get funded with up to $200K
✅ No personal deposit
✅ Keep up to 90% of the profits

Are you ready to scale your trading strategy? pic.twitter.com/doSyGjxJx5

— Kraken (@krakenfx) September 4, 2025

Passing both tests means receiving a trading account and access to up to 90% of the profits generated. Withdrawals are processed on demand, in the USDC stablecoin. The catch is that if you fail the tests, the initial fee is forfeited, and the funded account itself remains subject to the same loss restrictions.

Traditional online prop trading firms provide funds to traders, but they lack their own infrastructure. Some (so-called white-label prop trading firms) also utilize the services of external brokers. The acquisition represents a hybrid of Breakout’s model with Kraken’s technological backbone, where traders can access up to $200,000 in trading capital.

Regulatory Issues and Controversies Related to Prop Trading

Ultimately, Breakout services are to be included in the Kraken Pro platform offering.

The online prop trading model itself, however, isn’t entirely positive. In the US, companies based on it have faced numerous regulatory challenges, the most notorious of which is the case of MyForexFunds, which was closed by the CFTC . Regulators accused it of, among other things, harming and misleading customers.

The average trader, however, doesn’t need officials to have doubts about this capital-raising model. It’s an open secret that the company’s offered account—for example, $10,000—is merely an illusion, and the client only receives what they can afford to lose, which in the case of Breakout—a mere 8% after passing both stages. Nevertheless, Kraken’s involvement in this industry could be a step toward legitimizing and streamlining crypto prop trading.

The exchange, which obtained a license in Cyprus earlier this year, also acquired futures trading platform NinjaTrader for $1.5 billion, allowing it to launch CFTC-regulated futures trading in the US.