Kraken Expanding its London-based Subsidiary with the Help of FCA
One of the worldโs leading digitalย currency exchanges, Kraken, is asย ofย now in advanced discussions with the U.K.โs Financial Conduct Authority (FCA) to expand its subsidiary, Cryptocurrency Facilities, based in London. Theย growth plans include venturing into new avenues of asset custody and fiat-denominated futures contracts.
Krakenโs Return to the Unitedย 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.
Afterย theย exit of FTX from the derivatives market, Kraken sees aย chance to fill the void. To accomplish this, they need to extend their multilateral trading license, whichย may take 6 to 12 months. Before FTXโs exit, the volumeย ofย trading averaged $700 Million to $800 Million per day, but it has now dropped to around $100 million.
Regulatory Challenges in the UK
Kraken recently introduced deposit support for euros and British pounds via PayPalโs mobile application. Nonetheless, new regulations on cryptocurrency promotions have forced PayPal to stop allowing Unitedย Kingdom customers to buy cryptocurrency through its platform from October. Furthermore, the enforcement of the โtravel ruleโ by cryptocurrency corporations in the Unitedย Kingdom to combat money laundering activities has created compliance challenges due to inconsistent worldwide application.
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: Krakenโs Expansion and Regulatory Challenges
As Kraken intendsย to expand its London-based subsidiary and navigate regulatory obstacles, it demonstrates the cryptocurrency industryโs dynamic nature. The collaboration with the FCA and the introduction of new services and contracts reflect Krakenโs determination to thrive in the institutional market. Nonetheless, the UKโs 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 wholeย lotย of topic of discussion and debate.
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