Kraken Explores Expansion into Traditional Stocks and ETFs
Kraken, a leading US-based cryptocurrency exchange, is reportedly planning to expand its product offerings to include traditional stocks and exchange-traded funds (ETFs). This move signifies Kraken’s first venture beyond the realm of crypto assets, according to sources familiar with the matter.
The exchange aims to establish a new branch called Kraken Securities, which will facilitate the trading of US-listed stocks and ETFs. However, regulatory approvals are necessary before the service can be launched, which is expected to happen in 2024.
Although Kraken has not officially confirmed these plans, a spokesperson for the company stated that they are committed to broadening their offerings and improving access for clients.
Kraken Obtains Approval for Operations in EU Countries
This potential expansion follows Kraken’s recent authorization to operate in various European countries, including Spain and Ireland. The Central Bank of Ireland granted Kraken an e-money institution (EMI) license, while it also successfully registered as a virtual asset service provider (VASP) in Spain.
Kraken had previously obtained VASP licenses in Italy and Ireland. Curtis Ting, Kraken’s Vice President for Global Operations, expressed confidence in Europe’s forward-looking regulations and highlighted the company’s excitement about becoming part of the local fintech sectors in Ireland and Spain.
Additionally, Kraken has secured the necessary regulatory permit to operate in the United Kingdom. However, it has faced regulatory pressure in the US due to increased scrutiny on the crypto industry.
IRS Investigation and Settlement with SEC
In July, a judge ordered Kraken to provide a significant amount of user information to the Internal Revenue Service (IRS) as part of an investigation into potential tax evasion. The order, issued by the United States District Court for the Northern District of California, requires Kraken to disclose details of users who conducted transactions exceeding $20,000 within a calendar year.
Furthermore, Kraken had to pay a $30 million fine and close its crypto staking service in February to settle allegations of securities law violations brought by the Securities and Exchange Commission (SEC).
Hot Take: Kraken’s Diversification Strategy Signals Growing Market Demand
Kraken’s decision to expand into traditional stocks and ETFs reflects the increasing demand for diversified investment options within the cryptocurrency market. By offering access to these traditional financial instruments, Kraken aims to attract a broader range of investors and position itself as a comprehensive platform.
This strategic move also aligns with Kraken’s recent expansion into European countries, demonstrating its commitment to global growth and compliance with regulatory frameworks. However, the company faces ongoing challenges from regulatory bodies in the US, highlighting the need for careful navigation of the evolving legal landscape.
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