Kraken Requires UK Users to Verify Self-Custodial Wallets
Kraken, a prominent cryptocurrency exchange, has implemented a new requirement for its users in the United Kingdom. According to Kraken, UK users must verify their self-custodial wallets or validate their wallet identities due to regulations in the country.
Users Must Confirm Ownership of Custodial Wallets
An email from Kraken outlines the request for users to confirm ownership or control of self-custodial wallets used for cryptocurrency transactions. Users are also required to provide information about external self-custodial wallets and the residential address associated with the owner of a crypto address. Failure to comply by February 23 will result in a temporary ban from the exchange.
Industry Trend of Increased Visibility into External Crypto Addresses
Kraken’s move aligns with a broader trend among cryptocurrency exchanges to gain visibility into the external crypto addresses used by their customers. Bitstamp and Coinbase have also implemented similar requirements, citing new regulations imposed by governments.
Kraken Expands Operations in EU
Kraken has received authorization to operate in several European countries, including Spain and Ireland. The exchange has obtained an e-money institution (EMI) license from the Central Bank of Ireland and is registered as a virtual asset service provider (VASP) in Spain. Kraken views Europe as having forward-looking regulation that enables growth with confidence.
Regulatory Pressure on Kraken in the US
Kraken has faced regulatory pressure in the US, including an order to provide user information to the Internal Revenue Service (IRS) for an investigation into potential tax evasion. The order requires Kraken to disclose information about users who engaged in transactions exceeding $20,000 within a calendar year.
Recently, Kraken has also expressed interest in entering the crypto ETF custody race.
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