Kraken Custody Becomes Official Custodian of Ethena USDe Reserves

On January 6, 2026, Kraken formalized a major partnership with Ethena Labs. The American exchange becomes one of the institutional custodians of assets backed by USDe, the synthetic dollar that rose to be among the three largest stablecoins in the world. This selection, validated by the Ethena 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 on crypto assets (ETH, BTC, stETH) and equivalent short positions on derivatives markets. This complex architecture requires custody infrastructure adapted to intensive operational flows.

Kraken Custody meets these requirements. Operated by Kraken Financial, a special purpose depository institution (SPDI) chartered bank of Wyoming, the service offers cold storage with total asset segregation. Funds held for Ethena are kept one to one, in isolated vaults protected from custodian bankruptcy risk – a crucial requirement for DeFi protocols managing several billion dollars.

Guy Young, founder of Ethena, explained the logic of this choice in the official statement: Kraken’s selection reflects the Risk Committee’s commitment to evolving USDe on infrastructures meeting institutional expectations. The depth of the US regulatory framework, operational controls, and Kraken’s security architecture correspond to the standards defined by the protocol.

A rigorous selection by the Risk Committee

The Ethena Risk Committee is an independent body elected by the DAO governance. Its role: to assess and validate every decision likely to affect the protocol’s risk profile. For January 2026, its members notably include Blockworks Advisory, Kairos Research, Llama Risk, and Steakhouse Financial.

To integrate new custodians, the committee applies a 50-criteria evaluation process structured in three areas. Security and custody operations account for 40% of the final score, with a minimum of 8/10. Operational capacity represents 30% (minimum 7/10). Protocol requirements complete the evaluation at 30% (threshold 8/10). Any candidate with a history of customer fund losses or availability under 99.9% is automatically excluded.

Kraken thus joins Copper and Ceffu, Ethena’s historic custodians specialized in off-exchange settlement of derivative positions. Unlike them, Kraken will focus on custody of reserve stablecoins: USDT, USDC, PYUSD, USDtb, and yield-bearing tokens deployed on Aave.

Kraken Custody’s security architecture

Kraken’s value proposition is based on multiple layers of protection. The infrastructure combines hardware security modules (HSM) and multi-party computation (MPC) for managing private keys. The internal cybersecurity teams oversee the entire system.

Gurpreet Oberoi, head of Kraken Institutional, highlighted 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 over 200 digital assets and targets 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 UK, Australia, and the European Economic Area through obtaining a MiCA license from the Central Bank of Ireland.

Enhanced transparency starting January 2026

The agreement foresees Kraken Custody’s participation in Ethena’s transparency mechanisms. Practically, this translates to monthly signed attestations and weekly Proof of Reserves reports published as of January 2026.

This requirement is part of a broader trend. Since the passage of the 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 (thus technically outside the direct scope of the law), Ethena voluntarily adopts these good practices to reassure institutional investors.

The protocol also demonstrated the robustness of its infrastructure during the Bybit hack in February 2025. Approximately 30 million dollars of latent gains were exposed on the exchange at the time of the incident. Thanks to the separation between custody (handled by Copper) and trading, no reserve assets were compromised. Only unsettled P&L required handling, with no impact on users.

Context: USDe facing a turbulent period

This infrastructure strengthening comes as USDe goes through a correction phase. After peaking at nearly 15 billion dollars in TVL in October 2025 – making Ethena the fastest protocol in history to reach 10 billion capitalization for a stablecoin – metrics have significantly declined.

In January 2026, TVL dropped back to around 6.5 billion dollars, a 55% decrease over three months. Capital outflows exceeded 8 billion dollars during this period, reflecting an allocation adjustment amid less favorable funding rates and increased competition with other protocols like Sky ex MakerDAO.

USDe’s capitalization remains around 6.47 billion dollars, maintaining its position as the third-largest stablecoin globally behind Tether (USDT) and Circle (USDC). The ENA token shows marked volatility with a price fluctuating around $0.18 to $0.22.

What this means for users

For holders of USDe and sUSDe (the staked version generating yield), adding Kraken as custodian brings several concrete guarantees.

Diversification of counterparty risks reduces exposure to a potential default of a single custodian. Kraken Financial’s bankruptcy-remote structure means Ethena’s assets are legally protected from the exchange’s creditors in case of distress.

Frequency of attestations (weekly for Proof of Reserves) allows near real-time monitoring of the adequacy between circulating USDe 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 still hesitant about offshore or unregulated custody solutions.

La Rédaction C.

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