Kraken Institutional has partnered with onchain yield platform Upshift to enable eligible institutional clients to earn yield on idle bitcoin, ETH, stablecoins, and other crypto assets directly within Kraken's qualified custody, according to an announcement shared with The Block. The partnership addresses institutional demand for unified platforms that combine asset safeguarding with productivity features rather than requiring separate counterparties for each function. The move reflects broader innovation in crypto vaults and intensifying competition among exchanges over prime brokerage offerings, where yield generation on idle funds serves as a core differentiator.
Upshift Builds Custom Vaults for Kraken Institutional Clients
Upshift will build dedicated vaults tailored to each client's specific investment strategy, risk parameters, liquidity needs, and asset mix. The firms are working with a "vetted," though unnamed, "group of professional vault curators across a range of asset types and risk profiles," according to the announcement.
Assets allocated to these non-custodial vaults will be deployed into selected onchain contracts, with a receipt token returned to the client's segregated Kraken custody account. "Institutional controls and accounting are enforced at the vault, protocol, chain and token levels," the announcement reads.
Kraken and Upshift are using a white-label model with bespoke vaults for individual clients "rather than generic shared pools." This approach differs from the largest vault providers like Morpho and Yearn, which pool users' funds. MiCA-licensed Tesseract has pursued a similar strategy of designing distinct smart contract vaults for individual clients.
Bespoke vaults enable greater customization over security and risk concerns and will provide "proprietary opportunities in both private and liquid markets," said Gregory Barasia, head of asset management at Kraken Institutional.
Kraken Institutional Competes in Prime Brokerage Market
"Institutions increasingly want a single platform to safeguard their assets and make them productive, not a separate counterparty for every function," Barasia said. "That is what Kraken Institutional is building."
The partnership comes as crypto exchanges like Kraken and Coinbase continue to compete over their prime offerings, with the ability to earn yield on idle funds a core selling point. Custodians like BitGo and Anchorage are also beginning to experiment with onchain deployments using offchain, secured funds.
"Kraken pairs qualified custody with a full set of prime services, while Upshift provides the vault infrastructure to put assets to work," Upshift CEO Aya Kantorovich said in the release. "Together, clients can generate yield without spinning up new wallets, counterparties or protocols, while maintaining rigorous risk management built in."
Institutional uptake of vaults has been limited to some extent by the fact that the largest vault providers pool users' funds. There are also some open questions regarding U.S. securities laws and vaults that pool investor funds, namely around the Howey Test.
Upshift Raised $10 Million Series A in March 2025
Upshift is a B2B infrastructure provider that can deploy vaults on dozens of chains and is one of the largest providers on Stellar and Solana. The startup raised a $10 million Series A led by Dragonfly in March 2025.
FAQ
What did Kraken Institutional announce with Upshift?
Kraken Institutional partnered with onchain yield platform Upshift to let eligible institutional clients earn yield on idle bitcoin, ETH, stablecoins, and other crypto assets directly inside Kraken's qualified custody.
How do the Upshift vaults work for Kraken clients?
Upshift builds dedicated vaults tailored to each client's specific investment strategy, risk parameters, liquidity needs, and asset mix. Assets allocated to these non-custodial vaults are deployed into selected onchain contracts, with a receipt token returned to the client's segregated Kraken custody account.
When did Upshift raise its Series A funding?
Upshift raised a $10 million Series A led by Dragonfly in March 2025.
