Kraken Institutional, a leading digital asset platform catering to institutional investors, has announced a significant strategic partnership with Upshift, a prominent multi-chain, multi-protocol vault infrastructure provider. This collaboration aims to seamlessly integrate permissioned, custom DeFi yield strategies directly into the Kraken Institutional experience, marking a pivotal advancement in how institutional capital can be deployed for yield generation within a secure and regulated framework. The partnership, detailed in a recent announcement, signifies a move to bridge the gap between the robust security of qualified custody solutions and the dynamic opportunities presented by decentralized finance.
The integration allows Kraken Institutional clients to access a sophisticated suite of DeFi yield-generating strategies directly from their existing custody accounts. This means that institutions can now tap into bespoke and curated on-chain strategies without the need to manage separate wallets, onboard multiple third-party providers, or build complex infrastructure to coordinate between on-chain and centralized financial activities. This streamlined approach is designed to significantly reduce operational overhead and complexity for institutional investors seeking to optimize their digital asset portfolios.
This launch represents a confluence of Kraken’s established institutional-grade services – including qualified custody, deep exchange liquidity, prime execution, OTC services, staking, and margin financing – with Upshift’s advanced institutional vault infrastructure. The combined offering is engineered to provide a more capital-efficient pathway for institutions to generate yield and capitalize on cross-market opportunities through a singular, trusted institutional relationship. The strategic alignment between Kraken, a long-standing player in the digital asset space, and Upshift, a specialist in institutional DeFi infrastructure, underscores a growing trend towards institutional adoption of more complex digital asset strategies.
The Mechanics of Institutional Vault Integration
The core of this new offering lies in the ability for institutions to deploy assets into permissioned vaults directly from their Kraken Institutional custody accounts. When an on-chain allocation is initiated, the underlying asset is deployed to selected vault contracts. Crucially, a receipt token representing this position is then returned to the client’s segregated Kraken qualified custody solution. This receipt token is not pooled or rehypothecated, ensuring that clients retain clear visibility into their assets. It is reflected at its redeemable underlying value on the custody statement, providing absolute clarity on what can be withdrawn at any given time. Throughout this process, institutional controls, including permissions, approvals, and reporting, are meticulously maintained at the vault, protocol, chain, and token levels.
Unlike generic, shared DeFi pools that can introduce significant counterparty and operational risks, Upshift specializes in constructing custom, dedicated vaults. These vaults are meticulously designed around a specific client’s unique strategy, asset mix, liquidity requirements, and risk parameters. Kraken will collaborate with Upshift and a carefully curated group of vetted, professional vault curators to support a diverse array of strategies. These strategies will span Decentralized Finance (DeFi), Centralized Finance (CeFi), Payments Finance (PayFi), and Real-World Asset (RWA) tokenization, and will be accessible across more than 30 different blockchain networks. This granular customization is a key differentiator, addressing the specific needs and risk appetites of sophisticated institutional investors.
Beyond Custody: A Comprehensive Institutional Ecosystem
The partnership fundamentally redefines the role of custody in institutional digital asset management. Idle assets, whether stablecoins, Bitcoin, or Ethereum, held within Kraken Institutional can now serve as the foundational element for more ambitious capital deployment strategies. Kraken’s offering extends beyond mere safekeeping; it integrates qualified custody with the essential institutional services required for efficient capital deployment across exchange, Over-The-Counter (OTC), and on-chain markets. This comprehensive suite includes:
- Qualified Custody: The bedrock of security and regulatory compliance for institutional assets.
- Prime Brokerage Services: Offering a consolidated platform for trading, lending, and execution.
- Deep Liquidity: Access to robust liquidity pools across various trading venues.
- OTC Trading: Facilitating large block trades with minimal market impact.
- Staking Services: Enabling clients to earn rewards on proof-of-stake assets.
- Margin Financing: Providing leverage for sophisticated trading strategies.
- Institutional Vaults (via Upshift): The gateway to permissioned, customized DeFi yield opportunities.
The synergistic effect of these integrated services is the creation of a more capital-efficient institutional yield platform. Clients gain a single point of access to generate yield, eliminating the need to independently manage disparate wallets, blockchain networks, trading venues, counterparties, or DeFi protocols. This not only simplifies operations but also alleviates the significant operational burden that has historically made many attractive yield opportunities impractical for institutions.
Aya Kantorovich, CEO and Co-Founder of Upshift, commented on the strategic importance of this collaboration, stating, "Institutions have long faced a trade-off between secure custody and putting funds to work. Kraken and Upshift remove the operational overhead of sourcing yield efficiently across exchange, OTC and onchain markets that have kept capital idle." She further elaborated, "Kraken pairs qualified custody with a full set of prime services, while Upshift provides the vault infrastructure to put assets to work. Together, clients can generate yield without spinning up new wallets, counterparties or protocols, while maintaining rigorous risk management built in." This sentiment highlights the core problem the partnership aims to solve: the friction between security and yield generation in the institutional digital asset landscape.
Gregory Barasia, Kraken’s Head of Asset Management for Kraken Institutional, echoed this sentiment, emphasizing the transformative potential of the integration: "Custody should be the starting point for what institutions can do with their assets, not the ending point. Vaults are the next step in making Kraken Custody the most productive place for institutional capital to sit." This statement underscores Kraken’s vision of evolving its custody services from a passive holding solution to an active, yield-generating hub for institutional capital.
Unlocking New Opportunities for Institutions
For eligible institutional clients, this integration effectively dismantles a long-standing barrier: the need to choose between the absolute security of holding assets and the imperative of putting those assets to work to generate returns. The underlying architecture of the solution is meticulously designed to activate capital already held within Kraken Institutional, while simultaneously preserving institution-specific risk parameters, governance processes, approval workflows, and comprehensive reporting capabilities.
This unified approach grants eligible clients a singular access point to a diverse array of opportunities. These include curated on-chain yield strategies, sophisticated centralized market-based strategies, access to deep exchange liquidity, credit facilities, derivatives trading, and bespoke OTC deal execution. The critical advantage is that this expanded access is achieved without the imposition of a separate, complex operating stack, thereby maintaining operational efficiency.
The market context for this announcement is significant. As of early 2025, institutional interest in digital assets continues to mature. Following the initial waves of adoption and the establishment of regulated custody solutions, the focus has increasingly shifted towards yield generation and more sophisticated investment strategies. Upshift, having successfully raised a $10 million Series A round led by Dragonfly in March 2025, has positioned itself as a key infrastructure provider in this evolving landscape. This funding underscores investor confidence in Upshift’s multi-chain, multi-protocol vault approach for institutional DeFi.
Availability and Future Outlook
The Institutional Vaults offering is currently rolling out to eligible Kraken Institutional and Kraken Custody clients in supported jurisdictions. Access is subject to standard onboarding procedures, product eligibility assessments, and strategy-specific terms and conditions. Institutions interested in exploring this new capability are encouraged to contact their dedicated Kraken Institutional representative or visit the kraken.com/institutions website for more information and to initiate the access request process.
The implications of this partnership are far-reaching. It signifies a maturation of the institutional digital asset market, moving beyond basic custody and trading to encompass more complex financial strategies. By integrating institutional-grade custody with sophisticated DeFi infrastructure, Kraken and Upshift are paving the way for a future where institutional capital can be deployed more efficiently and effectively across both traditional and decentralized financial ecosystems. This trend is likely to accelerate as more institutional players seek to harness the unique opportunities presented by digital assets within a secure and compliant framework. The collaboration sets a precedent for how traditional financial institutions and digital asset innovators can converge to create a more integrated and productive financial future.
Legal Disclaimers:
Custody services are provided by Payward Financial, Inc. or Payward Europe Solutions, Ltd, as applicable. Payward Financial, Inc. d/b/a Kraken Financial is not an FDIC-insured bank and deposits are neither insured by nor subject to the protections of the FDIC. Payward Europe Solutions Limited, trading as Kraken, is regulated by the Central Bank of Ireland.
Rewards are variable and not guaranteed; you can lose some or all of your assets. Interacting with on-chain smart contracts involves risks which are further detailed in the terms of service, including technological risk (bugs, exploits, and oracle/MEV/bridge failures), market risk (price volatility, de-pegs, and liquidation where relevant), and operational risk (irreversible transactions, gas fees, network congestion). Kraken does not control third-party protocols. Offered by Payward Wallet, LLC. Fees apply. Availability varies by jurisdiction.
OTC services, including spot trading, derivatives, and lending, are offered by Payward Oceanic Ltd., a member of the Kraken Group. These products are available only to eligible clients and may not be offered in all jurisdictions. OTC transactions involve risk and may result in the loss of capital. This communication is for informational purposes only and does not constitute investment, legal, or tax advice. Availability is subject to applicable laws and regulatory requirements.
