Kraken, a regulated cryptocurrency exchange based in the United States, reportedly plans to expand beyond crypto by offering stock and exchange-traded fund (ETF) trading to clients in the United States and the United Kingdom.
According to recent reports, Kraken has since created a new division called Kraken Securities to facilitate the development of this new service set for launch in 2024.
Kraken To Launch Stock Trading Platform In 2024
Kraken is not immediately clear why it is diversifying its base and opting to support trading US-based stocks and ETF derivatives beyond crypto. Since launching in 2011, Kraken has exclusively facilitated trading various cryptocurrencies, including Bitcoin and Ethereum.
According to CoinMarketCap data on September 27, Kraken was among the most popular exchanges, registering an average daily trading volume of over $495 million. Additional data reveals that Kraken is one of the most liquid and visited sites. Looking at recent statistics, the exchange drew more users than Coinbase and Bitstamp.
Although there are reports that Kraken has decided to remain competitive in the evolving financial markets, how it will cope with challenges in the equities market remains to be seen. The broader cryptocurrency scene has been under immense pressure for the last two years.
After most digital assets soared to record highs in late 2021, the sharp contraction in 2022, coupled with increasing regulatory scrutiny in 2023, has significantly impacted market participation, slashing the revenue of most crypto exchanges.
Kraken will also face other diversified ramps, including Robinhood, a popular platform that supports crypto trading. Even so, with dropping interest and fragile asset prices, it is yet to be seen how Kraken will adjust itself in light of arising challenges.
Moreover, although it has a significant crypto user base, how it will adapt to offer equally high-quality securities trading experience remains to be seen.
Kraken Expands To Europe Months After Settling With SEC
On September 26, Kraken secured an E-Money Institution (EMI) license from the Central Bank of Ireland. It also revealed that it had registered with the Bank of Spain as a Virtual Asset Service Provider (VASP).
Kraken’s Vice President of Global Operations, Curtis Ting, lauded Europe’s “forward-looking” regulations. Ting said they would “grow with confidence with the EMI license.”
We see a firm foundation for crypto in Europe, which has forward-looking regulation that enables us to grow with confidence. We are grateful for the constructive approach to regulating industry growth set by the Central Bank of Ireland and the Bank of Spain. We are excited to become part of their vibrant local fintech sectors in both Ireland and Spain. We also look forward to continuing our investments in Europe more broadly.
In February, Kraken closed its crypto staking-as-a-service platform for customers in the United States. Additionally, they paid $30 million as a settlement for charges the Securities and Exchange Commission (SEC) had brought forward, claiming that the exchange offered unregistered securities through its staking platform.