Kraken is in discussions with regulators in several European countries to obtain a new license to enter the European market by the end of 2021.
As a Kraken spokesperson explains, the exchange operates in Europe through its presence in the UK and registration with the UK’s Financial Conduct Authority (FCA).
Jesse Powell explained that the exchange is targeting several jurisdictions for potential regulatory approval as early as this year. Kraken has reportedly already been in discussions with several European regulators, in Malta, Luxembourg, and Ireland. While discussions are ongoing, no official decision has been made as of yet.
Currently, Kraken operates in nearly 190 countries around the world. The company is licensed by the UK’s Financial Conduct Authority (FCA). A company spokesperson also told industry news sources that they are compliant with the Fifth Anti-Money Laundering Directive (AMLD5).
But, the FCA’s approval remains limited. With Brexit still in effect, FCA approval will also not help Kraken expand to other countries in Europe. Thus, the mission to obtain these licenses from other regulators is now on.
In June 2021, Coinbase received a license in Germany from BaFin (the German Federal Financial Supervisory Authority) to legally operate in Europe. Jesse Powell pointed out that Kraken was reluctant to follow the same path, however.
According to him, the exchange also held discussions with BaFin, but found the regulatory climate in Germany “too difficult, too restrictive and therefore too costly for the company.”
Although Kraken has not yet released its latest financial results, Powell made it clear that he expects a “record year” for the company. According to him, in January and February 2021 alone, the exchange gained more users than it did in the entire previous year.
In the first 6 months of the year, Kraken recorded more than $485 billion in trading volume, more than three times the volume reported in 2020, the best year in the company’s history to date.
Kraken has been considering entering the European market for some time. Earlier this year, the company announced the launch of its app on the continent, giving people access to trading and transactions in more than 50 crypto-currencies. The app is now available in Europe and a few states in the United States – with the notable exception of names like New York and Washington state.
Even though it is not fully operational in Europe, Kraken has been able to grow significantly. The company is ranked as the third-largest exchange in the world according to CoinMarketCap, behind Binance and Coinbase. When the app launched, Kraken said it had 7 million customers. Launching fully in Europe will help the company grow its user base even more.