U.S.-based cryptocurrency exchange Kraken is preparing to expand operations in the European market, according to the German press. The coin trading platform is in talks with regulators and plans to acquire a license in an EU member state, its founder Jesse Powell revealed.
Kraken to Enter European Market by End of Year
Kraken, a major digital asset exchange in the U.S., plans to reestablish its presence in the European Union this year, according to Handelsblatt. The publication notes the development comes as the crypto industry continues to mature, attracting more investors amid a market recovery. Commenting on his company’s intentions, founder and CEO Jesse Powell told the German newspaper:
We are working on a license in an EU country.
The San-Francisco-headquartered crypto firm wants to reach the common European market by the end of 2021, the report revealed, possibly through Malta, Luxembourg or the Republic of Ireland. A final decision is yet to be made as the exchange is in ongoing talks with supervisory bodies on the Old Continent.
With a daily transaction volume of around $1.3 billion, according to data provided by Coingecko, Kraken ranks as the world’s fifth largest cryptocurrency exchange. The trading platform has over 6 million users in 190 countries and more than 2,000 employees, according to its own numbers.
Earlier this year, Coinbase, the largest crypto exchange in the U.S. and Kraken’s main competitor, led the way as it acquired approval to store and trade cryptocurrencies from the Federal Financial Supervisory Authority, Bafin. With the German license, Coinbase can now provide services to customers across the European Union.
Germany, UK Not Suitable for European Base
Jesse Powell made it clear, however, that Germany is not ideal as a European base for Kraken. The exchange has held talks with Bafin as well, but it considers German regulations “too difficult, too restrictive.” That means it would be too expensive for the company to comply.
Despite Britain having the most competent regulator, it’s not an option either after Brexit. The Financial Conduct Authority (FCA) has been dealing with cryptocurrencies since 2013 but as the U.K. left the European Union, it would no longer be possible to obtain and maintain an EU-wide license in its jurisdiction. Kraken owns Crypto Facilities Ltd., a crypto derivatives trading platform authorized and regulated by the FCA.
Conducting an Initial Public Offering (IPO) is the next step for Kraken, which was valued at $10 billion in its latest funding round. The company has had a successful year so far after gaining more users in the first two months of 2021 than in all of 2020. It also registered a trading volume of over $485 billion in the first half, which is more than three times the volume from last year.
Kraken also plans to offer crypto-focused online banking services in the U.S. towards the end of this year. That will be possible thanks to a banking license the exchange received in the state of Wyoming last September. Powell pointed out that Kraken’s users will be able to link their bank accounts to their cryptocurrency accounts.
Which EU country do you expect to host Kraken’s European headquarters? Tell us in the comments section below.