On January 6, 2026, Kraken formalized a major partnership with Ethena Labs. The American exchange becomes one of the institutional depositories of assets backed byUSDethe synthetic dollar that has become one of the three largest stablecoins in the world. This selection, validated by theEthena Risk Committee (ERC)marks a decisive step in the institutionalization strategy of the DeFi protocol.
Why this partnership is significant
USDe is not a classic stablecoin. Unlike USDT or USDC backed by fiat reserves, it is based on a delta-neutral strategy combining long positions in crypto assets (ETH, BTC, stETH) and equivalent short positions in derivatives markets. This complex architecture requires a custody infrastructure adapted to intensive operational flows.
Kraken Custody meets these specifications. Operated by Kraken Financiala Specially Chartered Bank of Wyoming (SPDI), the service offers cold storage with full asset segregation. Funds held for Ethena are maintained one for onein isolated vaults and protected against the risks of custodian bankruptcy – a crucial requirement for multi-billion dollar DeFi protocols.
Guy Young, founder of Ethena, clarified the logic of this choice in the official press release: the selection of Kraken reflects the commitment of the Risk Committee to develop the USDe on infrastructures meeting the institutional expectations. The depth of the US regulatory framework, operational controls and security architecture of Kraken correspond to the standards defined by the protocol.
Rigorous selection by the Risk Committee
The Ethena Risk Committee is an independent body elected by the governance of the DAO. Its role: to evaluate and validate each decision likely to affect the risk profile of the protocol. For January 2026, its members include in particular Blockworks Advisory, Kairos Research, Llama Risk And Steakhouse Financial.
To integrate new depositaries, the committee applies a 50-criteria evaluation process structured in three parts. Security and guard operations account for 40% of the final score, with a floor set at 8/10. Operational capacity represents 30% (minimum 7/10). The protocol requirements complete the evaluation to the tune of 30% (threshold of 8/10). Any candidate with a history of loss of customer funds or an availability rate lower than 99.9% is automatically excluded.
Kraken thus joins Copper And CefuEthena's historical custodians specializing in the off-exchange settlement of derivative positions. Unlike the latter, Kraken will focus on guarding reserve stablecoins : USDT, USDC, PYUSD, USDtb and yield-producing tokens deployed on Aave.
Kraken Custody security architecture
Kraken's value proposition relies on multiple layers of protection. The infrastructure combines hardware security modules (HSM) and of multi-party calculation (MPC) for private key management. Internal cybersecurity teams supervise the entire system.
Gurpreet Oberoi, Head of Kraken Institutional, noted that this partnership demonstrates the exchange's ability to manage complex institutional workflows while maintaining high standards of security and compliance. Kraken Financial's regulated structure offers institutional clients an environment comparable to traditional finance standards.
The service currently supports more than 200 digital assets and is aimed at a wide range of institutional clients: listed companies, venture capital funds, asset managers and hedge funds. In 2025, Kraken expanded its geographic coverage to the United Kingdom, Australia and the European Economic Area by obtaining a MiCA license from the Central Bank of Ireland.
Strengthened transparency from January 2026
The agreement provides for Kraken Custody's participation in Ethena's transparency mechanisms. Concretely, this translates into signed monthly certificates and reports Weekly Proof of Reserves published from January 2026.
This requirement is part of a broader trend. Since the passage of GENIUS Act In July 2025 in the United States, stablecoin issuers face increased obligations regarding reserves, audits and financial integrity. Although USDe is a synthetic dollar and not a fiat-backed stablecoin (therefore technically outside the direct scope of the law), Ethena voluntarily adopts these best practices to reassure institutional investors.
The protocol has also demonstrated the robustness of its infrastructure during the Bybit hack in February 2025. Approximately $30 million in unrealized gains were exposed on the exchange at the time of the incident. Thanks to the separation between custody (at Copper) and trading, no reserve assets have been compromised. Only unsettled P&L required processing, with no impact on users.
Context: USDe faces a period of turbulence
This strengthening of infrastructure comes as USDe is going through a correction phase. After peaking at nearly $15 billion in TVL in October 2025 – making Ethena the fastest protocol in history to reach 10 billion capitalization for a stablecoin – the metrics have fallen significantly.
In January 2026, the TVL fell back to around $6.5 billiona drop of 55% in three months. Capital outflows exceeded $8 billion over the period, reflecting an adjustment in allocations in a context of less favorable funding rates and increased competition with other protocols such as Sky ex MakerDAO.
The capitalization of the USDe nevertheless remains around $6.47 billionmaintaining its position as the third global stablecoin behind Tether (USDT) and Circle (USDC). The ENA token, for its part, displays marked volatility with a price oscillating around $0.18 to $0.22.
What it changes for users
For holders of USDe and sUSDe (the staked version generating yield), the addition of Kraken as a custodian provides several concrete guarantees.
There diversification of counterparty risks reduces exposure to a possible default of a single depositary. The structure bankruptcy-remote of Kraken Financial means that Ethena's assets are legally protected from the exchange's creditors in the event of difficulties.
There frequency of certificates (weekly for Proof of Reserves) allows near real-time monitoring of the adequacy between USDe in circulation and reserve assets. This visibility is essential for a synthetic stablecoin whose hedging mechanism relies on derivative instruments.
Finally, Kraken Financial's American regulatory anchoring can facilitate USDe's access to certain institutional markets that are still reluctant to deal with offshore or unregulated custody solutions.
USDe is a synthetic dollar built on Ethereum. Unlike traditional stablecoins backed by fiat reserves, it maintains its parity via a delta-neutral strategy combining long crypto assets and short derivative contracts.
The Ethena Risk Committee selected Kraken after a 50-criteria assessment covering security, operational capabilities and protocol requirements. The regulated structure of Kraken Financial (a Wyoming chartered bank) and its segregated cold storage architecture meet the desired institutional standards.
The main risks include the volatility of funding rates on derivatives markets, counterparty risk on exchanges used for hedging, and potential vulnerabilities of smart contracts. The Ethena reserve fund aims to absorb periods of negative funding.
USDe, as a synthetic dollar not backed by fiat reserves, does not fall directly within the scope of the GENIUS Act which targets payment stablecoins. Ethena nevertheless voluntarily adopts transparency practices aligned with these standards.
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