Cryptocurrency exchange Kraken plans to offer its customers access to traditional United States-listed stock trading.
According to an anonymous source which Bloomberg quoted in its report, the offering is expected to launch next year. As a cryptocurrency exchange that has been in operation for the last twelve years, this move marks Kraken’s first foray into non-crypto products.
There will also be access to UK stock trading. Both offerings will be provided and managed through a new division dubbed Kraken Securities.
Crypto Firms Consider Other Investments
This is likely Kraken’s strategy to diversify its offerings away from cryptocurrencies after surviving the bear market of 2022 which saw the likes of Celsius Network, 3AC, and FTX file for bankruptcy. Defunct cryptocurrency exchange FTX introduced the option to trade Exchange-traded funds (ETF) and stocks just a few months before it imploded and faced bankruptcy.
Similarly, some other firms are trying to get the approval of the U.S. Securities and Exchange Commission (SEC) to list spot Bitcoin (BTC) ETF. The U.S. and UK stock trading will bring Kraken into the crowded market space of zero-commission players like Robinhood Markets Inc. and Public.com.
Kraken to Receive Approval from U.S. Watchdog
Delving into this line of investment offerings will require that the crypto exchange holds certain licenses and is authorized by the appropriate entities. Notably, Kraken already possesses the required authorization from the UK and it has also applied with the Financial Industry Regulatory Authority (FINRA) for a broker-dealer license in the U.S.
A Kraken spokesperson confirmed the news of the expansion to Reuters. “While we can’t comment on rumors or speculation, we’re looking to broaden and enhance our offering so clients continue to have secure and seamless access to Kraken’s full product suite,” the spokesperson said.
Licenses and Regulations
Kraken has a couple of digital asset licenses from many regions including Spain and Ireland. Last year, the exchange received a full operating license from the Abu Dhabi Global Markets (ADGM) and the Financial Services Regulatory Authority (FSRA). The exchange may be seeking an alternative to the U.S. market.
Just like many other digital asset service providers in the United States, Kraken has faced enforcement action from regulators. Kraken reached an agreement with the U.S. SEC to stop its staking program and pay $30 million to resolve the SEC complaints.