Kraken in Advanced Discussions with U.K. Regulators to Expand and Fill the FTX Void

Kraken in Advanced Discussions with U.K. Regulators to Expand and Fill the FTX Void


Kraken Expanding its London-based Subsidiary with the Help of FCA

One of the world’s leading digital currency exchanges, Kraken, is as of now in advanced discussions with the U.K.’s Financial Conduct Authority (FCA) to expand its subsidiary, Cryptocurrency Facilities, based in London. The growth plans include venturing into new avenues of asset custody and fiat-denominated futures contracts.

Kraken’s Return to the United Kingdom Market

After acquiring Cryptocurrency Facilities in 2019, Kraken is now in talks with the FCA to broaden its asset custody services. Mark Jennings, the CEO of Cryptocurrency Facilities, revealed that they are likewise negotiating the introduction of futures contracts denominated in fiat currencies held for their clients. These contracts will mainly target institutional investors.

After the  exit of FTX from the derivatives market, Kraken sees a chance to fill the void. To accomplish this, they need to extend their multilateral trading license, which may take 6 to 12 months. Before FTX’s exit, the volume of trading averaged $700 Million to $800 Million per day, but it has now dropped to around $100 million.

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Regulatory Challenges in the UK

Kraken recently introduced deposit support for euros and British pounds via PayPal’s mobile application. Nonetheless, new regulations on cryptocurrency promotions have forced PayPal to stop allowing United Kingdom customers to buy cryptocurrency through its platform from October. Furthermore, the enforcement of the “travel rule” by cryptocurrency corporations in the United Kingdom to combat money laundering activities has created compliance challenges due to inconsistent worldwide application.

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The cryptocurrency community is likewise debating guidelines established by the Financial Action Task Force (FATF), which require corporations to disclose transaction identities. The unique aspects of the cryptocurrency industry, such as self-custodied wallets not managed by regulated entities, have raised concerns and criticisms regarding the adaptation of these norms.

Hot Take: Kraken’s Expansion and Regulatory Challenges

As Kraken intends to expand its London-based subsidiary and navigate regulatory obstacles, it demonstrates the cryptocurrency industry’s dynamic nature. The collaboration with the FCA and the introduction of new services and contracts reflect Kraken’s determination to thrive in the institutional market. Nonetheless, the UK’s evolving regulatory environment and worldwide inconsistencies pose challenges for both Kraken and other cryptocurrency corporations. Striking a balance between regulatory compliance and the unique characteristics of the cryptocurrency industry remains a whole lot of topic of discussion and debate.

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Cino Gaperi stands out as a prominent crypto analyst, accomplished researcher, and adept editor, making significant contributions to the field of cryptocurrency. With a strong background in crypto analysis and research, Cino’s insights delve deep into the intricate aspects of digital assets, appealing to a diverse audience. His keen analytical skills are complemented by his editorial proficiency, allowing him to distill complex crypto information into easily digestible content.

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