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Kraken launches VIP program requiring $10 million balance as exchange targets wealthy crypto traders
Kraken has launched Flexline, a crypto-backed lending product for Kraken Pro users that allows eligible clients to borrow against digital asset holdings at fixed rates ranging from 10% to 25%, with loan terms spanning two days to two years.
The product, unveiled Wednesday, allows eligible clients to borrow against their digital asset holdings without selling them, offering fixed-rate terms ranging from two days to two years.
The move positions Kraken crypto loans within a broader resurgence of collateralized digital asset lending across centralized exchanges, decentralized finance platforms and even traditional financial institutions.
According to Kraken, loan proceeds can be issued in cryptocurrency or stablecoins and may be traded on the platform or withdrawn, depending on regional eligibility.
The company describes its main exchange as “geared toward beginners and individual investors, while Kraken Pro is for advanced and institutional traders.”
Under the Flexline structure, Kraken crypto loans enable customers to pledge supported cryptocurrencies as collateral and receive funds shortly after approval.
Annual percentage rates range between 10% and 25%, according to Kraken’s website, though the exchange has not publicly disclosed specific loan-to-value ratios.
Kraken stated that collateral is held in segregated wallets and included in its Proof of Reserves attestations, which it says verify client assets on a 1:1 basis.
“Collateral is held in segregated wallets and included in Kraken’s Proof of Reserves attestations,” — Kraken, in its product announcement.
As with most crypto-backed lending models, collateral may be liquidated if maintenance requirements are breached or if the loan reaches maturity without repayment.
Kraken crypto loans can be repaid early using an account balance, though early repayment fees apply.
The product is not available in Australia, Brazil, Canada, India, New Zealand, Switzerland, the United Arab Emirates, the United Kingdom or the United States, reflecting regulatory constraints in those jurisdictions.
By limiting availability, Kraken crypto loans are being positioned primarily for eligible international users operating on Kraken Pro.
The introduction of Kraken crypto loans comes one day after Kraken announced tokenized equity perpetual futures on its regulated derivatives platform.
The offering provides eligible non-U.S. clients with 24/7 leveraged exposure to major U.S. stock indexes, gold and individual companies such as Apple, Nvidia and Tesla.
The back-to-back product launches suggest a strategy to expand Kraken’s advanced trading ecosystem, combining derivatives exposure with Kraken crypto loans that allow users to unlock liquidity without liquidating core holdings.
For professional traders and institutions, crypto-backed loans can serve as a capital efficiency tool, enabling hedging or leveraged strategies while retaining long-term exposure to digital assets.
However, fixed-rate borrowing costs between 10% and 25% place Kraken crypto loans at the higher end of traditional credit markets, reflecting volatility risk inherent in crypto collateral.
Kraken crypto loans enter a market that has shown renewed growth after turbulence in prior cycles.
Across decentralized finance (DeFi), lending protocols collectively hold approximately $51.9 billion in total value locked, with about $30.8 billion actively borrowed, according to data from DefiLlama.
Among decentralized platforms, Aave accounts for nearly half of the sector’s total value locked at just under $26.9 billion, followed by Morpho at roughly $5.8 billion. Institutional interest has also increased.
On Feb. 15, Apollo Global Management, which oversees approximately $940 billion in assets, announced a partnership with Morpho to support blockchain-based lending infrastructure, stating it could acquire up to 90 million MORPHO tokens as part of the collaboration.
Within the centralized exchange sector, competitors are also expanding offerings. Coinbase recently broadened its collateralized loan product, enabling eligible U.S. users to borrow up to $100,000 in USDC against select digital assets without selling.
The convergence of exchange-based lending, DeFi protocols and institutional participation suggests that crypto-backed credit markets are maturing.
Kraken crypto loans, through Flexline, represent the latest iteration of this trend, offering fixed-rate predictability in a space historically dominated by variable-rate models.
For crypto investors, the expansion underscores a central trade-off: liquidity without liquidation versus exposure to liquidation risk if markets move sharply.
As Kraken crypto loans roll out internationally, market participants will be watching whether demand for fixed-rate borrowing sustains momentum amid evolving regulatory scrutiny and competitive pressures.
With digital asset lending regaining traction, Kraken crypto loans position the exchange as an active contender in a sector once shaken by instability but now seeking structured, compliance-oriented growth.
