On September 28, Bloomberg Law reported, citing people familiar with the matter, that cryptocurrency trading platform Kraken plans to launch trading services for U.S. listed stocks and exchange-traded funds (ETFs) in 2024. This marks the first time that 12-year-old Kraken has branched out beyond its cryptocurrency business. The new service will be offered through its newly formed division, Kraken Securities, and will initially launch in the United States and the United Kingdom. Kraken currently has the required regulatory licenses in the UK and has applied for a broker-dealer license from the Financial Industry Regulatory Authority in the US.

Actively expand business beyond crypto trading

BlockBeats reported on July 20 that Kraken appointed hedge fund veteran Mark Jennings as CEO of its UK-based institutional crypto-asset derivatives trading agency Crypto Facilities. Kraken acquired Crypto Facilities for a nine-figure price in 2019. For regulatory reasons, the two maintain separate brands and operate separate entities. It is reported that Jennings joined Kraken in January 2022 as head of European operations.

On August 2, Kraken co-founder Jesse Powell said regarding FTX’s 2.0 restart plan that FTX 2.0 will be worse than starting from scratch. He pointed out that FTX 2.0 has no team, no technology, no license, no bank cooperation, and the brand has been damaged. He suggested that custodians should auction domain names and trademarks to the highest bidder. Anything beyond that is just a fee extraction attack on delusional creditors.

Subsequently, Crypto Facilities entered into talks with the UK Financial Conduct Authority on September 7 to expand its services to custody a wider range of client assets, seeking to enter the void in the cryptocurrency derivatives market left after the collapse of FTX. Company CEO Mark Jennings said that Crypto Facilities provides crypto asset futures contracts to institutional investors and is currently negotiating to provide its customers with futures contracts denominated in the legal currencies they hold. This negotiation process is expected to take 6 to 12 days months time.

On September 26, Kraken announced that it had obtained an Electronic Money Institution (EMI) license from the Central Bank of Ireland and registered as a Virtual Asset Service Provider (VASP) with the Bank of Spain, allowing Kraken to work with European banks to expand its euro fiat services. Additionally, Kraken’s new VASP registration will enable it to offer cryptocurrency exchange and custodial wallet services to Spanish residents.

#Kraken faces huge regulatory pressure this year

The U.S. government has been taking active actions against encryption supervision. On February 9 this year, the SEC announced a settlement with the encryption trading platform Kraken. Kraken agreed to "immediately" stop providing on-chain staking services to U.S. customers and pay a fine of US$30 million. Resolved SEC charges that it offered unregistered securities.

**Related reading: "****Kraken paid US$30 million to "purchase settlement", is the US SEC's encryption supervision more thunderous than rainy? **》

"Affected by the collapse of institutions such as FTX, the United States has begun to strengthen supervision of the encryption field. Recently, the U.S. SEC issued a statement on its official website stating that the agency will regard the supervision of emerging technologies such as cryptocurrency as its top priority in 2023 and will regulate the use of emerging technologies. Broker-dealers and investment advisers in financial technology, including crypto, are being investigated on whether they meet the "standard of care" expected by investors and whether they regularly review and update their risk management procedures.

It is worth mentioning that U.S. regulators will also tighten tax supervision on U.S. investors. The U.S. Internal Revenue Service (IRS) filed a petition with the court on Thursday seeking approval to enforce a subpoena against the Kraken crypto trading platform and its subsidiaries. The IRS said in the petition that it first issued the subpoena in 2021. "

Kraken, however, refused to comply with the IRS subpoena, which the IRS feared would be burdensome and overly broad.

As a result, on July 1, The Block reported that at the request of the IRS, a judge ordered the cryptocurrency trading platform Kraken to hand over certain personal information about its users, including names, dates of birth, physical addresses, phone numbers, and tax identification. No. etc. According to the order, the IRS wants Kraken to identify accounts with annual cryptocurrency transactions of at least $20,000 between 2016 and 2020.

On July 5, according to DL News, a court in California ruled that the cryptocurrency trading platform Kraken must comply with the requirements of the U.S. Internal Revenue Service (IRS). A Kraken spokesperson said that if this information was leaked by the IRS, customers would be exposed to identity theft and other harm, and Kraken prevents this from happening.

Two days later, the New York Times reported that the FBI had searched the home of former Kraken CEO Jesse Powell in March this year as part of an investigation into his hacking and cyberstalking of a non-profit art group. part. Agents from the FBI and the U.S. Attorney's Office for the Northern District of California have been investigating Powell since at least last fall. A Kraken spokesman said the investigation was not related to the company and there was no reason to believe prosecutors were looking into other potential issues.