The world’s third-largest crypto exchange company, Kraken, is reportedly planning to expand its footprint beyond crypto by offering US-listed stocks and exchange-traded funds (ETFs). The exchange plans to commence its stock trading program by 2024.
According to a Bloomberg report on Wednesday, September 27, citing a person familiar with the matter, The company initial plan is to offer stock trading in the United States and United Kingdom somewhere in 2024 through a service built by its new division called Kraken Securities.
Crypto exchange Kraken plans to expand into stock trading almost two years after Bitcoin peaked — a move that would put it head-to-head with Robinhood https://t.co/uiwTmCL2z3
— Bloomberg Crypto (@crypto) September 27, 2023
Kraken Forays Into TradFi as Trading Volume Fades Away
Although the company was founded in 2011 and launched in 2013, is currently the world’s third-largest crypto exchange by spot trading volume, its trading volume has seen a significant decline recently. According to CoinMarketCap data, its 24-hour spot trading volume is around $500 million, which is lower than the exchanges ranked behind it. The derivates volume is even lower at just $20 million.
A slew of problems in recent months has jeopardized the exchange’s business. In February, Kraken reached an agreement with the United States Securities and Exchange Commission (SEC) to stop offering staking services or programs to US customers and paid a $30 million fine.
As previously reported, the Australian Securities and Investments Commission (ASIC) has sued Bit Trade, the provider of Kraken’s crypto exchange services in Australia. In July, the FBI raided the home of Kraken founder and former CEO Jesse Powell for the alleged hacking of Verge Center of the Arts, a non-profit arts group he founded.
Kraken hasn’t yet confirmed its plans to move to tradFi. Nevertheless, the extension beyond its crypto roots would require licenses in the US and UK to offer US-listed stocks and ETFs. According to the person cited in the report, the exchange already holds the required regulatory permit in the UK and has applied with the financial industry regulatory authority for a broker-dealer license in the US. The company is targeting a 2024 launch to start the stock trading service.
The reported move came nearly a year and a half after the collapsed crypto exchange FTX US announced plans to launch a stock trading platform. The move will put Kraken in direct competition with Robinhood which also allows its users to trade both traditional stocks and crypto.
Nevertheless, Kraken is moving ahead with its crypto business outside the US. On September 26, the exchange announced that it had secured licenses related to digital asset services in both Spain and Ireland.
Great news! The Central Bank of Ireland has granted Kraken an EU e-money license. We have also secured a VASP registration with the Bank of Spain.
🇪🇺 This highlights our ongoing commitment to growing our European business.
Learn more 👇 https://t.co/WKcXQvo22e
— Kraken Exchange (@krakenfx) September 26, 2023