A Look At Nasdaq’s Increased Scrutiny of Companies with Crypto Treasuries, as Kraken Acquires Breakout

Nasdaq has intensified oversight of publicly listed companies holding significant cryptocurrency assets, aiming to protect investors and maintain market integrity.

The new rules require these companies to obtain shareholder approval before issuing new shares to fund crypto purchases. This move targets firms following the model pioneered by MicroStrategy (now Strategy), which holds over 636,505 BTC. The scrutiny comes amid a surge in corporate crypto treasuries, with 154 U.S.-listed companies planning to raise $98.4 billion for digital asset acquisitions in 2025, per Architect Partners.

Non-compliant firms risk trading suspension or delisting. The increased regulation has impacted stock prices, with Strategy dropping 3.5%, BitMine Immersion 8.7%, and SharpLink Gaming 9% on the announcement day, alongside a broader crypto market dip (Bitcoin down 2.5%).

Companies listed on Nasdaq will now need to obtain shareholder approval before issuing new shares to fund crypto purchases. This move aims to ensure investors are fully aware of the company’s strategy and risks involved.

Nasdaq will require enhanced disclosure demands and may suspend trading or delist companies that fail to comply with the new rules. This move has already led to a decline in stocks of companies focused on crypto treasuries, such as Strategy, BitMine, American Bitcoin, SharpLink Gaming, and DeFi Development Corp.

Many companies are pivoting towards crypto-focused treasuries, with 184 public companies announcing plans to raise over $132 billion for crypto purchases. Nasdaq’s move may slow down this trend. The increased scrutiny from Nasdaq reflects a broader push for transparency and regulatory clarity in the crypto industry.

Companies are diversifying beyond Bitcoin and Ethereum into assets like Solana, XRP, BNB, and Toncoin, with AlphaTON Capital (formerly Portage Biotech) announcing a $100 million TON treasury. The rules align with U.S. laws like the 2025 GENIUS and CLARITY Acts, emphasizing transparency. This could slow crypto adoption but enhance long-term credibility.

Requiring shareholder approval for share issuances to fund crypto purchases ensures investors are informed, reducing risks of speculative or mismanaged crypto investments. Stricter oversight may curb aggressive crypto accumulation, potentially stabilizing stock prices of affected companies and the broader market.

The approval process and compliance costs could deter smaller firms from building crypto treasuries, limiting corporate participation in digital assets. Companies may diversify into less volatile assets or delay crypto purchases, as seen with firms exploring Solana, XRP, or Toncoin alongside Bitcoin.

Compliance with Nasdaq’s rules and U.S. laws (e.g., GENIUS and CLARITY Acts) will raise legal and administrative expenses, impacting profitability. Stocks of crypto-heavy firms like Strategy (-3.5%), BitMine Immersion (-8.7%), and SharpLink Gaming (-9%) already saw drops, reflecting investor concerns over regulatory hurdles.

Transparent practices could attract institutional investors, boosting confidence in companies with compliant crypto strategies. Slower treasury accumulation may temper demand for Bitcoin and altcoins, potentially pressuring prices in the short term.

Regulatory alignment could enhance crypto’s credibility, encouraging cautious institutional adoption over time. Companies like Strategy, with established crypto holdings, may face less disruption than smaller players struggling with compliance.

Stricter U.S. rules contrast with looser regulations elsewhere (e.g., Hong Kong or Singapore), potentially pushing crypto-focused firms to list on foreign exchanges. Firms may explore alternative funding mechanisms (e.g., debt or partnerships) to bypass share issuance restrictions.

Companies might invest in blockchain analytics to meet transparency requirements, fostering innovation in compliance tech. While Nasdaq’s scrutiny may slow corporate crypto adoption and pressure stock and crypto prices short-term, it could foster a more sustainable, transparent integration of digital assets into corporate finance, aligning with broader regulatory trends.

Kraken Acquires Breakout— A Tampa-Based Proprietary Trading Firm

Kraken, a major U.S.-based cryptocurrency exchange, acquired Breakout, a Tampa-based proprietary trading firm founded in 2023 by crypto industry veterans TraderMayne, CryptoCred, Alex Miningham, and Abetrade.

The acquisition integrates Breakout’s evaluation-based trading model into Kraken Pro, allowing skilled traders to access up to $200,000 in notional capital—$100,000 per account, with the ability to hold multiple accounts—without personal deposits, except for non-refundable evaluation fees.

Traders must pass a rigorous, performance-based assessment focusing on risk management, strategy consistency, and drawdown limits, with successful traders retaining up to 90% of profits, paid on-demand, including in USDC stablecoin. The platform supports over 50 crypto pairs, with up to 5x leverage on Bitcoin and Ethereum contracts.

This move, following Kraken’s $1.5 billion acquisition of NinjaTrader in May 2025 and Capitalise.ai in August 2025, expands Kraken’s advanced trading offerings and aligns with its merit-based capital allocation philosophy, as stated by co-CEO Arjun Sethi: “Breakout gives us a way to allocate capital based on proof of skill rather than access to capital itself.”

Breakout’s CEO Alex Miningham emphasized the synergy, noting the deal creates a “unified ecosystem” for traders, from education to capital deployment. The acquisition also positions Kraken as the first crypto exchange to enter proprietary trading, leveraging its infrastructure for scalability and liquidity.

While financial terms were undisclosed, Breakout had raised $4.5 million in a 2024 seed round. The move has sparked speculation about Kraken preparing for a potential 2026 IPO, though some in Kraken’s community question the synergy with its existing offerings. Critics note the unregulated nature of prop trading poses risks, urging caution due to potential scams.

By integrating Breakout’s prop trading model into Kraken Pro, Kraken diversifies its platform beyond traditional retail and institutional trading. This move attracts skilled traders who lack capital, offering them access to significant notional funds (up to $200,000) through a performance-based evaluation.

The acquisition builds on Kraken’s recent purchases of NinjaTrader and Capitalise.ai, signaling a strategic push into advanced trading tools, automation, and capital allocation models, potentially strengthening its competitive edge against rivals like Coinbase and Binance.

Democratization of Trading Access

Breakout’s model, which allocates capital based on skill rather than wealth, lowers barriers for talented traders who lack personal funds. This merit-based approach could attract a new demographic of traders, fostering inclusivity and potentially uncovering high-performing traders who might otherwise be excluded from crypto markets.

The ability to earn up to 90% of profits, paid on-demand in USDC, provides financial flexibility and aligns with the crypto ethos of decentralization and self-sovereignty. Kraken becomes the first major crypto exchange to enter the proprietary trading space, a novel move in the industry.

This could set a precedent, prompting competitors to explore similar models, potentially reshaping how crypto exchanges engage with traders. The integration of Breakout’s 50+ crypto pairs and up to 5x leverage on major assets like Bitcoin and Ethereum enhances Kraken’s appeal to high-risk, high-reward traders, potentially increasing trading volume and revenue.

The acquisition fuels speculation about Kraken’s potential 2026 IPO. By expanding its portfolio with innovative trading solutions, Kraken strengthens its value proposition to investors, showcasing growth potential and diversified revenue streams beyond spot trading and custody services.

However, the unregulated nature of prop trading introduces risks, as noted by critics. Regulatory scrutiny could complicate Kraken’s IPO plans, especially if authorities view prop trading as a gray area in crypto markets. The prop trading model, while innovative, carries inherent risks. The non-refunded evaluation fees and strict performance criteria may deter some traders or lead to perceptions of exclusivity.

Additionally, the unregulated prop trading space is prone to scams, which could tarnish Kraken’s reputation if not managed carefully. Community skepticism about the synergy between Breakout’s model and Kraken’s core offerings suggests potential challenges in user adoption. Kraken will need to invest in education and marketing to bridge this gap.

Kraken’s move could pressure competitors to innovate or acquire similar firms, intensifying competition in the crypto exchange space. It may also spur the growth of prop trading in crypto, creating a new niche market. By offering a “unified ecosystem” (as noted by Breakout’s CEO), Kraken could capture market share from traditional prop trading firms and unregulated crypto platforms.

The acquisition highlights the growing convergence of traditional finance (prop trading) and crypto, potentially attracting institutional interest in crypto-based prop trading models. This could drive further mainstream adoption of crypto as a legitimate asset class.

Kraken’s acquisition of Breakout positions it as a pioneer in crypto prop trading, with potential to reshape trader access and market dynamics. However, it must navigate regulatory risks, user skepticism, and operational challenges to fully capitalize on this strategic move.