Crypto exchange Kraken expands to these two European countries
- It is a significant step for Kraken’s expansion plans in the EU, as MiCA comes into force in 2024.
- Kraken has had its fair share of legal battles with the regulators across the U.S. and other countries.
U.S.-based crypto exchange Kraken recently secured authorizations in two leading European countries – Spain and Ireland.
In Spain, the exchange has received a virtual asset service provider (VASP) registration from the central bank. The registration allows Kraken to offer exchange and wallet custodial services to Spanish residents.
In Ireland, it has received an Electronic Money Institution (EMI) license from the central bank. The license allows it to expand Euro-to-crypto trading services to 27 European Union (EU) member states and European Economic Area countries.
Launched in 2011, the crypto firm is already registered as a VASP in Ireland and Italy.
Curtis Ting, Kraken’s Vice President of Global Operations, remarked,
“Today’s announcement marks another important milestone in our European expansion strategy… In both Ireland and Spain, we are excited to become part of their vibrant local fintech sectors. We also look forward to continuing our investments in Europe more broadly.”
It is a significant step for Kraken as it moves towards expanding in the EU. The markets in crypto-assets (MiCA) regulation will come into force in the EU in 2024. The regulation will be fully implemented by 2025.
As per MiCA, any company operating as a crypto service provider in the EU will need to register with one of the Union’s 27 authorities. A lot of exchanges are aggressively exploring expansion plans in the EU as it is getting increasingly difficult for crypto firms to survive in a hostile U.S.
Kraken battling regulators across markets
Kraken has had its fair share of legal battles with the U.S. regulators. In fact, both the securities and commodities regulators have taken action against the exchange in the past.
The Commodity Futures Trading Commission (CFTC) fined the firm $1.25 million in September 2021 for illegally offering margined retail commodity transactions in virtual assets, including Bitcoin [BTC], and failing to register as a futures commission merchant.
The crypto firm settled with the Securities and Exchange Commission (SEC) in November 2022 over allegedly violating sanctions against Iran. In the end, Kraken agreed to pay 362,000 in fines.
The firm again agreed to a $30 million settlement with the SEC in February 2023 for offering unauthorized crypto staking products. It said it would discontinue the product.
However, not everything has gone south for the exchange, as it received a crypto trading license in Abu Dhabi last year. When Canada recently began tightening its crypto rules, the exchange quickly filed a pre-registration undertaking with the regulator in March 2023.
But then, the Australian regulator recently sued Kraken’s local service provider, BitTrade. The regulator alleged that the exchange had failed to comply with design and distribution obligations, specifically for its margin trading offering. Consequently, it led to a total loss of approximately $8.35 million, the regulator claimed.
Like most crypto exchanges, Kraken is facing legal hurdles in different countries. Therefore, it will be interesting for us to observe if it can adopt its expansion strategy accordingly.