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