Kraken launches kHYPE, says token is backed 1:1 by HYPE in custody

By Thiago Alvarez

Kraken has launched kHYPE, a token that the exchange says is fully backed by HYPE held in custody. The launch brings Hyperliquid’s token to Ink, although the 1:1 backing statement remains an issuer claim. Kraken’s redemption terms also include conditions.

Kraken launches kHYPE

Kraken published its launch announcement on September 8, 2026, describing kHYPE as an Ethereum Request for Comments 20 (ERC-20) token, a standard used by Ethereum-compatible applications. Ink is the initial launch network, while support for additional networks remains planned for the future.

According to Kraken, each kHYPE is backed by an equivalent amount of HYPE held in Kraken custody. This describes the company’s stated backing arrangement and does not independently establish the balance of its reserves.

Kraken’s product documentation says kHYPE access is provided through HYPE withdrawals, and that no kHYPE trading pairs are currently available on its product. The launch adds another offering alongside Kraken’s US-listed stock trading for European Economic Area customers and Krak US debit card.

Kraken’s stated HYPE backing

Kraken’s product documentation identifies the custody provider as Kraken Financial, a Wyoming-chartered Special Purpose Depository Institution. The documentation also states that deposits are not insured by the Federal Deposit Insurance Corporation (FDIC), meaning the custody arrangement does not provide federal deposit insurance.

The announcement links to the kHYPE contract on Ink and a HYPE custody address, providing locations where users can inspect the token and backing assets. However, the custody explorer returned no readable balances in the evidence collected for this report, and the outstanding kHYPE supply was not retrieved. Those links alone therefore do not establish a reconciliation between reserves and token supply.

Kraken’s launch post promotes kHYPE for use across decentralized finance (DeFi) on Ink and says holders can swap back at any time. Its product terms qualify redemption as subject to availability and applicable terms, limiting that promotional language.

kHYPE is live on Kraken. Wrapped HYPE, backed 1:1 in Kraken custody. Verifiable onchain. Usable across DeFi on @Inkonchain . Swap back anytime. Read more: pic.twitter.com/pgcJH3EDGh — Kraken (@krakenfx) September 8, 2026

What remains unconfirmed

Kraken’s product documentation describes the conversion procedures. Users withdraw HYPE from their Kraken account with Ink (kHYPE) selected as the network. Depositing kHYPE through the HYPE asset and that network converts it into an equivalent amount of HYPE in the account, although geographic restrictions apply.

Kraken lists a minimum deposit of 0.2 kHYPE and a minimum withdrawal of 0.1 kHYPE. It gives an approximate processing time of 3 minutes and requires 180 layer-two (L2) confirmations on Ink.

The available evidence does not establish a complete fee schedule or independently reconcile custody balances with the kHYPE supply. No independent expert reaction was verified. The opportunity described here therefore comes from Kraken’s launch materials, while the documented limitations come from its own product disclosures.

Kraken says kHYPE will support the use of HYPE in DeFi on Ink, with broader network compatibility planned. A documented limitation is that HYPE withdrawn as kHYPE stops earning Kraken staking rewards. Users can re-enrol after converting back, but redemption remains conditional.