Key Highlights
- Kraken and Maple launched a new onchain lending facility that lets institutional investors borrow USDC using crypto assets.
- The facility uses a warehouse financing model from traditional finance, bringing a common credit structure to blockchain-based lending.
- Borrowers can access liquidity without selling their crypto, while loan and collateral data can be tracked onchain for greater transparency.
Crypto exchange Kraken has teamed up with onchain lending platform Maple to launch a new lending facility that allows institutional investors to borrow money against their crypto holdings without having to sell them.
According to the official release, the facility, announced today, would support Kraken’s over-the-counter (OTC) lending business and provide loans in USDC backed by assets such as Bitcoin (BTC) and Ether (ETH).
Bringing a traditional lending model to crypto
According to Kraken, the new facility is built using a structure known as warehouse financing, a model that has been used in traditional finance for many years. This structure is to fund mortgages, car loans, and other types of credit before those loans are packaged into larger investment products.
Maple and Kraken are now bringing a similar idea to the crypto market through a fully onchain system. Under the arrangement, institutional clients and wealthy crypto holders can use their digital assets as collateral to access cash while keeping ownership of their BTC, ETH, and other approved cryptocurrencies. This is expected to give borrowers a way to unlock liquidity without having to sell assets they may want to hold for the long term.
How Maple and Kraken will share responsibilities
According to the companies, Maple will provide the main pool of funding through a special purpose vehicle (SPV), a separate legal structure designed to protect the assets inside the facility. If either Maple or Kraken were to face financial problems, the assets held within the SPV would remain separated from the companies’ own balance sheets.
In turn, Kraken will play several roles in the process. The exchange will originate the loans, manage them, and take the first-loss position. In simple terms, this means Kraken will absorb losses before Maple’s lenders are affected if a borrower fails to repay a loan. The companies said this structure helps align the interests of everyone involved.
In addition, collateral backing the loans will be held by Kraken Financial, the exchange’s Wyoming-chartered Special Purpose Depository Institution (SPDI) and regulated qualified custodian. Meanwhile, Zaria, an independent SPV administrator, will oversee the administration of the facility.
A new credit structure built for institutional investors
Maple CEO and co-founder Sidney Powell said the project brings a major piece of traditional financial infrastructure into the blockchain world.
“The infrastructure that powers a multi-trillion-dollar ABS market in traditional finance has never existed onchain, until now,” said Sidney Powell, CEO and co-founder of Maple. “This Facility applies that model to digital asset collateral in a fully onchain environment, with the structural protections institutions actually require.”
The facility operates as a revolving line of credit. Borrowers can draw funds, repay what they owe, and borrow again without having to negotiate a completely new loan each time.
Kraken co-CEO Arjun Sethi said many clients have been looking for the same financing tools available in traditional markets. “Our clients want access to the same capital formation tools that have powered traditional credit markets for decades,” he said. Sethi added that the facility allows institutions and crypto holders to access liquidity while keeping their digital assets.
Expansion beyond lending
The launch comes as Kraken continues to expand its presence across multiple segments of the digital asset market.
Yesterday, Payward, the parent company of Kraken, announced a lead investment in prediction market platform Onyx Odds as part of the company’s Series A funding round, which valued the startup at $220 million. According to the company, Onyx Odds offers exchange-traded sports prediction markets and has grown to nearly one million users within its first year.
Earlier this month, Kraken also introduced on-chain trading for Solana-based tokens through its mobile app, giving users in the United States and more than 100 other countries access to over 2,500 tokens. The feature allows users to buy, hold, and sell Solana ecosystem tokens using USD or USDC without managing separate wallets, seed phrases, or gas fees directly.
Crypto lending continues to recover after past failures
The launch comes as institutional crypto lending continues to recover from the collapse of major lending firms such as Celsius, BlockFi, and Voyager, all of which filed for bankruptcy in 2022.
Those failures damaged trust in the sector and raised concerns about transparency. Maple and Kraken say their new model provides greater visibility because loan performance, collateral balances, and other key data can be tracked onchain in real time.
Also Read: Morgan Stanley and Galaxy Digital Link Crypto Lending to Bitcoin ETPs
