U.S. crypto exchange Kraken buys index provider Crypto Facilities

A man enters the CME Group offices in New York, U.S., October 18, 2017. REUTERS/Brendan McDermid

NEW YORK (Reuters) - U.S. virtual currency exchange Kraken said on Monday that it had acquired Crypto Facilities, a cryptocurrency index provider that calculates the reference price for CME Group Inc's CME.O bitcoin futures.

Kraken said the “nine-figure deal” was its largest acquisition to date. It gave no further financial details.

London-based Crypto Facilities calculates the CME CF Bitcoin Reference Rate, the index used to price the CME’s bitcoin futures, which were launched in December 2017. It also calculates CME’s reference rate for virtual currency ether and other cryptocurrency indices.

Crypto Facilities has established a separate legal entity, CF Benchmarks Ltd, to manage the index, a CME spokeswoman said.

Crypto Facilities also runs a cryptocurrency derivatives trading platform, which allows users to buy and sell futures for bitcoin, ether, XRP, litecoin and bitcoin cash. Some Kraken clients will have access to futures on six cryptocurrency pairs, Kraken said.

“Over the coming months, our teams will continue to enhance and expand these offerings,” Kraken Chief Executive Jesse Powell said in a statement.

San Francisco-based Kraken is one of the most popular U.S. cryptocurrency exchanges and has acquired other platforms in the past including Coinsetter and CleverCoin. Last year it processed almost $90 billion in trades, it said.

In September the New York Attorney General's office referred Kraken and other cryptocurrency exchanges to the state financial watchdog "for potential violation of New York's virtual currency regulations".

Powell responded on Twitter: “NY is that abusive, controlling ex you broke up with 3 years ago but they keep stalking you, throwing shade on your new relationships, unable to accept that you have happily moved on and are better off without them.”

Reporting by Anna Irrera; Editing by Susan thomas