- Kraken plans to add stocks and ETFs to its trading platform, potentially as early as 2024, making it the first crypto exchange to diversify beyond cryptocurrencies.
- Kraken’s move into traditional trading would position it against platforms like Robinhood and Wealthsimple, aiming to offer a broader range of financial products.
- Regulatory challenges and previous SEC settlements pose hurdles for Kraken’s expansion, especially in the United States.
According to Bloomberg, an unnamed source familiar with the topic claims that the new services could be offered for trade in both the United States and the United Kingdom. This move comes as Kraken faces heightened regulatory attention in the United States, where it recently settled Securities and Exchange Commission (SEC) accusations.
New Prospects for Kraken and Crypto Exchanges
Unlike other cryptocurrency exchanges, Kraken intends to enter the territory of traditional trading platforms such as Robinhood and Wealthsimple, both of which provide limited crypto token trading alongside stocks. Kraken’s new services would be developed by Kraken Securities, a newly formed subsidiary.
According to the same Bloomberg source, Kraken Securities has already obtained the requisite regulatory permissions in the United Kingdom; however, approval in the United States is still pending.
According to a Coindesk spokesperson, “Kraken is always exploring how it can power the global adoption of cryptocurrencies; 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.”
Previous Setbacks and Regulatory Obstacles
Kraken’s bold expansion aspirations are not without its difficulties. The crypto exchange was forced to close its crypto staking business and pay a $30 million fee to settle SEC accusations in February.
The exchange has increased its efforts to expand in nations other than the United States, where it faces less regulatory scrutiny. Kraken just secured a virtual asset service provider registration in Spain, allowing it to provide crypto exchange and custodial wallet services to Spanish consumers.
Kraken’s foray into the stock market is being viewed as a direct challenge to current platforms that offer a combination of crypto and traditional assets.
Prior to bankruptcy, FTX’s U.S. arm offered stock trading choices. If Kraken succeeds, it will create a precedent for other cryptocurrency exchanges to diversify their asset classes, increasing competition in both the crypto and stock markets.
The exchange’s capacity to deal with regulatory difficulties and get necessary permissions, notably in the United States, where it has recently suffered setbacks, will be critical to the venture’s success.
The crypto exchange, led by Kraken Securities, is entering an expanding financial ecosystem in which the barrier between traditional and digital asset trading is becoming increasingly blurred.