Kraken to secure European regulator’s licence by end-2021

By the end of 2021, the cryptocurrency exchange Kraken will enter the European market. The company is in talks with regulators in several countries to obtain an operating licence, said its head Jess Powell in an interview with Handelsblatt.

“We are working on obtaining a licence in one of the EU countries. Kraken wants to enter the Old World market by the end of the year. Malta, Luxembourg and Ireland suit us best. Talks with supervisory authorities are ongoing, so there is no concrete decision yet,” he said.

In June, the cryptocurrency exchange Coinbase received a licence from BaFin, which allowed it to provide services to EU clients. According to Powell, this option does not suit Kraken. He explained that the company had been negotiating with the authority, but German regulation is “too complex and restrictive and, as a consequence, too expensive”.

Earlier Powell stated, that Kraken, unlike Coinbase, which chose a direct listing on Nasdaq, will adhere to a conservative approach regarding IPO. The company has not changed its decision.

“We must work through an enormous list of tasks — the checklist consists of 1000 items. It is good for us that Coinbase was the first to go public. For example, it did not run a roadshow and did not work with exchange analysts. Perhaps that is why prices are weak. Now we can watch and learn,” he noted.

The head of Kraken added that the company is also watching the situation around Robinhood shares, which also offers users cryptocurrency trading.

Powell said that in January 2021 Kraken attracted more users than in the entire previous year, so “we can already talk about a record period.” In the first six months of trading, the platform’s volume reached $485 billion, more than triple the 2020 figure.

The CEO also commented on the infrastructure bill, part of which included new requirements for tax reporting by cryptocurrency firms in the United States. The document sparked heated debates — industry participants say that in its current draft it would make it impossible for miners and node operators to operate in the country.

“If the law really comes into force, a large portion of industry players would leave the United States or file lawsuits with the Supreme Court,” Powell said.

In September 2020, Kraken obtained the status of a special-purpose depository institution, empowering it with the functions of a traditional financial institution. The head of the company stressed that it would continue to develop in this direction.

“Kraken should become the preferred partner for major banks,” he added.

In conclusion, Powell noted the popularity of NFT and said the company would launch its own platform for storing and exchanging them.

As Reuters reports, Kraken is also eyeing the Indian market.

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