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Kraken Expands Horizons: Plans U.S. Stock & ETF Trading Services For 2024

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According to a recent report, crypto exchange Kraken is set to expand its services beyond the cryptocurrency market, as it plans to launch U.S.-listed stock and ETF trading services in 2024. It marks a significant move for the company, venturing into traditional financial markets for the first time. 

Kraken, established in 2011, has solidified its reputation as one of the oldest and most respe­cted names in the cryptocurre­ncy industry. Withstanding multiple bear markets, including the­ downturn of 2022 following Bitcoin’s peak at nearly $69,000.

Kraken has successfully obtained the necessary regulatory licenses in the United Kingdom. Currently, the company is active­ly pursuing a broker-dealer license from the U.S. Financial Industry Regulatory Authority.

Recent weeks have seen the exchange in the spotlight for various reasons. Last week, the Australian Securities and Investments Commission (ASIC) initiated legal proceedings against Bit Trade, Kraken’s crypto exchange operator in Australia. 

On a positive note­, Kraken recently obtained authorization from the Central Bank of Ireland to operate as an E-Money Institution (EMI). Additionally, the company is registered with the­ Bank of Spain and is now recognized as a Virtual Asset service provider (VASP), as reported by TronWeekly.

Kraken’s Move Into Traditional Equities

This rece­nt shift towards investing in stocks coincides with a decline­ in the cryptocurrency market, marke­d by lower trading volumes and waning industry appeal.

Kraken’s plan involves offering trading in U.S.-listed stocks and exchange-traded funds. This expansion will be facilitated through a new division called Kraken Securities, initially launching in the U.S. and UK markets. 

While the move diversifies the exchange’s offerings, it also presents challenges as it enters a competitive landscape of zero-commission trading platforms like Robinhood and Public.com.

Eligible Kraken customers will soon have the option to activate the stock trading service, seamlessly integrating with their existing crypto holdings. Additionally, the exchange is working on expanding its prime brokerage services and launching a qualified custodian for institutional clients soon. 

This custodial service will operate independently from the exchange and has a pending application for approval with the state of Wyoming.

While Kraken declined to comment on these developments, its growing market share this year indicates a positive trajectory despite a decline in trading volumes. The exchange’s 3.5% share of global spot trading is the highest since 2018, posing a challenge to market leader Binance, which has faced regulatory scrutiny worldwide in 2023.

Related Reading | Ethereum’s Technical Analysis Suggests a 12% Rally Could Materialize

Bitcoin: SEC Greenlights Franklin Templeton’s Spot ETF Amidst Congressional Pressure

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Franklin Templeton’s application for a spot Bitcoin exchange-traded fund received acknowledgment from the Securities and Exchange Commission [SEC] in a historic and pivotal move. This development holds immense significance for the AUM, managing assets worth up to $1.5 trillion, as it solidifies its presence in the asset management sector. With the filing of a 19b-4 form for their spot Bitcoin ETF proposal and the subsequent approval, Franklin Templeton has set the regulatory wheels in motion.

The 19b-4 form serves as a formal notification to the Commission regarding a proposed rule change by a self-regulatory organization [SRO]. Essentially, it is a document that informs a non-governmental entity exercising regulatory authority over a particular industry or profession about changes being proposed.

This announcement arrives at a time when the SEC is also deliberating on applications for spot crypto ETFs from various entities, including Hashdex. Franklin Templeton’s application stands out due to the company’s substantial footprint in the asset management landscape.

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Image Credit: Bitcoin Archive

Over the past few days, the SEC has come under intense scrutiny for its stance on spot ETF products. Notably, the regulator has announced delays in its decisions regarding Ethereum ETF applications from VanEck and ARK. It is essential to recognize that the SEC has a maximum of 240 days from the date of filing in the Federal Register to either approve or deny an ETF application.

This timeline places the decision date for these proposed funds in late May 2024. However, the regulator has the authority to solicit additional public input during several interim deadlines, potentially further extending the final verdict.

Bitcoin: SEC’s Gensler Doesn’t Hold Back

On September 26, U.S. Representatives Mike Flood, Wiley Nickel, Tom Emmer, and Ritchie Torres shot a letter to Gary Gensler, the chief of the U.S. securities watchdog, accusing him of displaying bias against spot Bitcoin exchange-traded products. They pointed to the legal precedent set by Grayscale Investments, which won a review of its own ETF offering.

The four lawmakers asserted that following the Grayscale court decision, there is “no reason to continue to deny” applications for spot crypto ETFs, emphasizing that the SEC’s rationale was deemed “arbitrary and capricious” in approving investment vehicles linked to Bitcoin futures. Despite the ongoing legal battles between his agency and crypto firms, Gensler has maintained a tight-lipped stance on the SEC’s approach to spot Bitcoin ETFs.

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Bitcoin: SEC Greenlights Franklin Templeton's Spot ETF Amidst Congressional Pressure 3

In fact, he upheld his confrontational stance against crypto “hucksters” during congressional testimony on September 27, choosing not to address the industry’s pressing questions. Gensler argued that digital asset companies had been recklessly handling customer assets, fueling further speculation about the SEC’s intentions in the evolving cryptocurrency landscape.

Binance Faces Tough Competition: 50% Market Share Loss in 2023

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At the close of 2022, Binance held a commanding 75% share of the market among exchanges that didn’t support the US dollar. However, as we fast-forward to August 2023, Binance’s market supremacy has dwindled to approximately 54%. According to available data, it is anticipated that the world’s largest exchange will further decline to about 50.76% in September 2023.

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Binance Faces Tough Competition: 50% Market Share Loss in 2023 6

In contrast, Binance’s competitor, Upbit, has experienced a notable surge in market share, rising from 6.19% in September 2022 to 14.51% in September 2023. Another rival, Huobi, has also witnessed substantial growth, going from 2.83% in September 2022 to 8.58% in September 2023. This trend unmistakably reveals a significant migration of users from this exchange to alternative platforms.

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Binance Faces Tough Competition: 50% Market Share Loss in 2023 7

Meanwhile, in the realm of exchanges supporting the US dollar, Coinbase remains a dominant force. In September 2022, Coinbase controlled roughly 25% of the market volume. A year later, the company’s influence has expanded to encompass nearly 41% of the market share. This surge in Coinbase’s market share can be attributed, in part, to FTX’s departure in November 2022, which prompted a considerable number of users to transition to other platforms.

Binance’s Dominance Crisis: What’s Behind the Shift?

Binance, along with its CEO Changpeng Zhao (CZ), has faced legal action from both the US Securities and Exchange Commission (SEC) and the Commodity and Futures Trading Commission (CFTC). The SEC has filed a lawsuit against the company, alleging a violation of U.S. securities laws. Simultaneously, the CFTC has taken legal action, accusing Binance of breaching federal laws and failing to register the exchange in the United States. Furthermore, Binance is currently under investigation in France and has recently withdrawn from the Dutch market. These ongoing regulatory concerns have likely contributed to the decline in the exchange’s market dominance.

In addition to these challenges, several high-ranking executives, including the CEO of its U.S. division, have recently departed from the company. Additionally, Binance has implemented substantial workforce reductions throughout the year, raising questions about the internal state of the exchange.

Another significant factor contributing to the decline in Binance’s performance could be the discontinuation of its zero-fee Bitcoin (BTC) trading promotions. The introduction of this feature in July 2022 attracted a substantial influx of customers to the platform, and its cessation may have played a role in the decline in the company’s market figures.

Mixin Network’s Bid $20M Bug Bounty For Hacker Behind $200M Breach

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In a strategic maneuver within the crypto realm, Mixin Network, the decentralized cross-chain protocol, sent a message to the hacker responsible for the staggering $200 million exploit on September 23. The message comes with an offer: a $20 million bug bounty in exchange for returning the stolen funds.

The message, encrypted with details of the exploit, implores the wrongdoer to consider that a substantial portion of the looted assets belong to users. It states, “Most of our platform assets were users, and we hope you can refund them. You can keep $20M of the assets as a BUG Bounty Reward for the BUG.”

The official confirmation of the exploit arrived conspicuously on September 25. In a candid disclosure, Mixin Network unveiled that the malefactors had adeptly penetrated the defenses of a third-party cloud service provider, thereby precipitating the unfortunate depletion of almost $200 million worth of assets from the platform. 

Mixin Founder’s Strengthens Community Trust

Feng Xiaodong, the visionary founder of Mixin, committed to compensating impacted users, offering restitution of up to a cap of 50%. The residual amount will be distributed as bond tokens, with the company strategically earmarking its earnings for their repurchase. This strategic move demonstrates Xiaodong’s dedication to rectifying the situation and fostering trust within the Netwok community.

The finer details surrounding the exploit remain shrouded in mystery. However, an on-chain analytic platform has highlighted the hacker’s prior engagements with Mixin Network. The address linked to the hacker, 0x1795, received 5 Ether (ETH) amounting to $1,588 from Mixin in 2022.

The modus operandi behind the audacious $200 million heist via a data breach continues to baffle experts. Cross-chain protocols, pivotal in decentralized finance (DeFi), have borne the brunt of some of crypto history’s most monumental exploits. Reports indicate that over half of all DeFi exploits have transpired within the domain of cross-chain protocols, culminating in staggering losses of over $2.5 billion.

The cross-chain protocols facilitate seamless interactions between distinct blockchain networks, enabling users to transfer assets. These protocols frequently accumulate substantial assets from various chains, rendering them susceptible to potential exploits.

Related Reading:| Hong Kong’s Crypto Crisis: Mixin Network Temporarily Halts Services

Ethereum’s OFAC Compliance: A Dramatic Drop In Censorship Post-Merge Upgrade

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Ethereum’s compliance with the Office of Foreign Assets Control [OFAC] has undergone a significant transformation, reduced by more than half since the momentous Merge upgrade was implemented in September 2022. OFAC-compliant blocks on Ethereum are those that exclude transactions involving parties subject to sanctions by the U.S. Treasury Department’s Office of Foreign Assets Control. The decline in compliant blocks is seen as a victory by those advocating for reduced censorship within the Ethereum ecosystem.

Prior to the Merge event, Ethereum’s OFAC compliance had been on an exponential rise. In November 2022, a substantial 78% of all Ethereum blocks were in compliance with OFAC regulations. This uptick was largely attributed to entities like cryptocurrency exchanges choosing to operate by censoring MEV-Boost relays on their validators.

Among the list of top offenders in terms of censorship were well-known platforms such as Binance, Celsius Network, Bitfinex, Ledger Live, Huobi [HTX], and Coinbase, according to data from MEV Watch. However, as of September 27, the OFAC compliance rate for Ethereum has plummeted to 30%, marking an overall reduction of 57%.

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Ethereum's OFAC Compliance: A Dramatic Drop In Censorship Post-Merge Upgrade 9

As of today, five out of the six largest block builders within the Ethereum network are in compliance with OFAC sanctions, according to Toni Wahrstatter, a researcher in the Ethereum community. Notably, the sole remaining large builder, titanbuilderxyz, continues to include OFAC-sanctioned transactions, primarily those related to Tornado Cash, in their blocks.

While the relay situation had improved significantly, thanks to the introduction of Ultra Sound, Agnostic, and BloXroute relays, there has been a resurgence in censorship by many of the top builders. This resurgence means that these builders no longer incorporate Tornado Cash transactions into their blocks.

The concept of censorship resistance therefore holds paramount importance in maintaining political neutrality within blockchain networks. The principle is that no single entity should wield control over two-thirds of a blockchain’s content as this goes against the ethos of the core values of decentralization.

Critical Role Of Non-Censoring Relays In Ethereum

To counter OFAC compliance, operators must employ relays that do not engage in censorship based on OFAC requirements. Among the seven major MEV-boost relays most commonly used, only three do not censor in line with OFAC compliance requirements, as per MEV Watch.

It is imperative to note that while not all blocks constructed by OFAC-compliant relays engage in censorship, all blocks built by OFAC-compliant relays will indeed censor when non-compliant transactions are broadcasted on the network. This underscores the significance of validators outside the U.S. considering the deployment of non-censoring relays for the greater benefit of the Ethereum network.

Ethereum’s Technical Analysis Suggests a 12% Rally Could Materialize

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Ethereum has been trading below the $1,600 mark, and on the daily chart, its price recently formed lower lows. Simultaneously, its Relative Strength Index (RSI) has been forming higher lows, creating a bullish divergence. Traditionally, this scenario indicates a weakening of bearish momentum and a potential resurgence of bullish control in the market. Typically, such bullish divergences are followed by upward price movements.

On the weekly chart, Ethereum has remained within a larger ascending wedge pattern, which is technically bearish. However, given the recent shift in short-term sentiment, there is a higher likelihood of a rebound from the lower trendline rather than a breakdown below it. Consequently, this situation has the potential to trigger a 12% increase in the price of Ethereum.

Ethereum’s Uphill Battle: A Warning to Investors About the Obstacles Ahead

However, it’s important to note that Ethereum (ETH) may not experience an immediate surge in price. Instead, the upward movement is likely to be gradual due to the onset of profit-taking activities. Recent data on exchange net flows indicates an influx of Ethereum into exchanges in the last few days. Specifically, on September 26, 2023, this metric recorded a value of +54,246.33, suggesting an increased trend of people selling ETH by depositing it into exchanges at the moment.

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Ethereum's Technical Analysis Suggests a 12% Rally Could Materialize 11

Furthermore, data from IntoTheBlock has shown a roughly 13% increase in wallets with zero balances over the past week. This indicates that a significant number of users have completely emptied their wallets, which serves as another warning sign. Consequently, if the pressure from these two factors continues to build, there is a possibility that ETH could decline to $1,422 in the medium term. As of the current moment, Ethereum, valued at $191 billion, is being traded at $1,591.6

Kraken Secures European Foothold: EMI License In Ireland & VASP Registration In Spain

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Recently, Kraken, a renowned cryptocurrency platform, has received significant authorizations that underline its commitment to expanding its European operations. 

According to an official press release, the exchange has been granted authorization by the Central Bank of Ireland to operate as an E-Money Institution (EMI). Simultaneously, the company has successfully registered with the Bank of Spain as a Virtual Asset Service Provider (VASP).

These authorizations hold great importance in the exchange’s strategy for European growth, coming on the heels of recent developments in Australia. Last week, the Australian Securities and Investments Commission (ASIC) initiated legal proceedings against Bit Trade, Kraken’s crypto exchange operator in Australia. 

As reported by TronWeekly, ASIC alleged that Bit Trade had failed to comply with design and distribution obligations for one of its trading products, specifically the failure to make a target market determination before offering it to Australian customers.

The EMI license, granted to Kraken’s subsidiary in Ireland, allows the platform to expand its Euro (EUR) fiat services in collaboration with European banks, serving clients across the 27 European Union (EU) member states and European Economic Area (EEA) countries.

In Spain, Kraken’s new VASP registration permits it to offer cryptocurrency exchange and custodial wallet services to Spanish residents, following similar registrations in Ireland and Italy. These licenses signify the exchange’s unwavering commitment to adhering to regulatory standards and expanding its European presence.

Kraken Regulatory Compliance & European Expansion 

Curtis Ting, Kraken’s Vice President of Global Operations, expressed his enthusiasm for these developments, emphasizing the favorable regulatory environment in Europe. He highlighted the company’s dedication to fostering crypto adoption and investment in improving services across the continent. 

Over the­ past year, the exchange­ has introduced several ne­w features. These­ include an NFT marketplace, the­ Kraken Pro advanced trading interface­, and an enhanced user e­xperience for we­b consumers.

Ting emphasized Kraken’s market-leading position in liquidity and volume for EUR crypto pairs, along with its 24/7 customer service and robust security. These strengths and regulatory compliance position Kraken as an attractive choice for future clients in Europe.

However, the company remains committed to ongoing investments in its European business, working towards advancing crypto adoption in the region in the years to come.

Related Reading | Former White House Official Joins Ripple As Head of U.S. Public Policy & Government 

Shiba Inu’s BONE Token Edges Towards $1 in its Pursuit of Full Decentralization

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The Shiba Inu [SHIB] ecosystem has garnered significant attention with the introduction of Shibarium. While Shibarium’s progress has been steady, the utility token Bone, which is utilized for covering gas fees within the Shibarium network, has seen notable growth. This offspring of the Shiba Inu network has had a somewhat turbulent year.

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Shiba Inu's BONE Token Edges Towards $1 in its Pursuit of Full Decentralization 14

However, it has recently been making progress towards reaching the $1 milestone. In contrast to Shiba Inu, Bone has often been in the $1 price range, but recent days have presented challenges for this meme coin. After a notable 11.47% surge, the price of Bone fluctuated between a low of $0.8113 and a high of $0.9249. As of the latest update, Bone is currently trading at $0.9044, reflecting a daily increase of 6.86%.

But what has triggered this sudden uptick in BONE’s value? Could it be linked to Shibarium? BONE serves a critical role within the Shibarium network. Furthermore, the team behind this meme coin has recently revealed that they are nearing the final stages of minting the remaining BONE supply, likely contributing to the increase in the asset’s price. Nevertheless, there is another factor driving this upward trend.

BONE Attains Full Decentralization Status

The Shiba Inu development team has been consistently delivering timely network updates. In a recent development, they shared what they described as “exciting news” and announced that Bone has undergone a renunciation. This means that the controlling entity of BONE’s contract has voluntarily surrendered its control. As a result, BONE is now fully decentralized and immune to any potential future modifications or manipulations.

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Shiba Inu's BONE Token Edges Towards $1 in its Pursuit of Full Decentralization 15

This accomplishment aligns with the decision made by the Shiba Inu community the previous year, which was to halt the creation of additional BONE tokens once the circulating supply reached 230 million. The remaining 20 million BONE tokens from the total maximum supply of 250 million were allocated for Shibarium validators, who play a crucial role in securing the L2 blockchain.

Bitcoin’s Inscriptions: Pioneering Block Fillers Or Precarious Miners’ Delight?

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Despite concerns that Bitcoin Ordinals are clogging the network, there is little evidence to suggest inscriptions are taking blockspace away from higher-value Bitcoin monetary transfers. On September 25, on-chain analytics firm Glassnode released “The Week On-chain” report, explaining minimal evidence of inscriptions displacing monetary transfers.

The Rise Of Inscriptions In Bitcoin

Since their introduction in February 2023, inscriptions have been a significant consumer of Bitcoin blockspace. Inscriptions can be considered a ‘packing filler,’ filling up any remaining space in blocks after higher-value monetary transfers are included. 

While fees and volume analysis typically consider the BTC volume being transferred and held, it’s essential to note that inscriptions may have a higher perceived ‘value’ beyond just their volume.

Despite the increase in fee revenue for miners due to inscriptions, the upcoming halving event may put significant income stress on miners unless Bitcoin prices substantially increase.

Introducing inscriptions in February 2023 marked a turning point in on-chain activity, mempool dynamics, and miner revenues. The mempool, a cloud of unconfirmed transactions awaiting inclusion in blocks, has experienced a surge in demand since February, coinciding with the release of Ordinals and Inscriptions.

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The rise in text-based inscriptions, particularly due to the emergence of the BRC-20 token, has significantly contributed to the increased demand for blockspace. Inscriptions leverage the SegWit split data structure to fit more transactions into blocks, resulting in a daily confirmed transaction count exceeding 550,000.

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Text-based inscriptions now make up a substantial portion of all transactions, accounting for 40% to 60% since May, surpassing image-based inscriptions. This surge has also led to a rapid expansion of the Unspent Transaction Output (UTXO) set.

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While inscriptions have a significant presence in block space, they tend to pay relatively lower fees per byte, making them sensitive to absolute fee levels. They are readily displaced by more urgent monetary transfers, which pay higher fees.

The dominance of inscriptions has led to a collapse in the median transfer volume, with smaller investors and inscription users transferring smaller amounts. This trend has also resulted in higher fee rates relative to transaction value.

While miners’ revenues have been boosted due to increased block space demand, the competition among miners has also grown substantially. Hashrates have increased by 50% since February, putting downward pressure on the hash price, the BTC or USD reward earned per Exahash. Miners are facing increased income stress, with profitability at risk, especially with the impending halving event.

Related Reading |  Breaking: Binance Closes Russia Chapter With Historic Agreement

Shiba Inu’s Address Triumph: 3.6M Strong & Growing

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Shiba Inu has buzzed the community with a pivotal milestone. Demonstrating its unwavering popularity in the face of recent price fluctuations, SHIB’s address count reached an unprecedented surge of over 3.6 million. The latest stats sourced from IntoTheBlock not only highlight the meme token’s ability to maintain its user base but also showcase a surge in the number of addresses holding a balance.

At present, a whopping 1.25 million addresses boast a Shiba Inu balance, underscoring the enduring allure of this cryptocurrency. The uptick in the number of Shiba Inu addresses goes beyond being merely a statistic; in fact, this is a crucial indicator of gauging the cryptocurrency’s performance. In the short term, the total number of addresses with a balance serves as a key metric of trader sentiment, often foreshadowing price movements.

Over the long haul, this indicator reflects the sustained interest in holding a specific cryptocurrency. A surge in addresses with a balance is universally regarded as a positive sign, indicative of a robust and expanding user base. Lately, crypto enthusiasts have received a glimpse of the forthcoming initiatives within the meme token sphere.

Lucie, the marketing expert for Shiba Inu, shared a video teaser featuring the enigmatic leader of the project, Shytoshi Kusama, alongside another undisclosed developer. This cryptic duo assumed the spotlight to unveil intriguing information about an upcoming application designed to elevate the project’s community involvement, foster connections, and stimulate creative cooperation.

Shiba Inu Team Teased “Super App” Shiba Hub

This inventive application, named Shiba Hub, has been hailed by the Shiba Inu team as an “entryway to something remarkable.” Dubbed a “super app” by the unidentified developer, Shiba Hub is poised to inject fresh vitality into the cryptocurrency community while seamlessly integrating with the unique Shibarium ecosystem. It extends an invitation to the community to embark on an innovation-driven journey and encourages them to play pivotal roles in a project poised to make a lasting impact.

This recent revelation coincides with the Shiba Inu layer-2 Shibarium blockchain’s recent integration with the token approval management service known as Revoke.cash. This integration aims to enhance the security of SHIB community members by enabling them to manage token approvals and safeguard their assets against potential fraudulent activities.