Cryptocurrency exchange Kraken is reportedly set to diversify its offerings by entering the US stock trading arena. The company has acquired a broker-dealer license from the US Financial Industry Regulatory Authority (FINRA) as part of this expansion plan.
According to a Bloomberg report on Sept. 27, Kraken intends to introduce stock trading services for US-listed stocks and exchange-traded funds (ETFs). This strategic move will unfold in the US and the United Kingdom sometime in 2024, facilitated through a new division named Kraken Securities. Expanding into traditional investment vehicles like stocks and ETFs requires regulatory licensing, and Kraken already holds licenses from both FINRA and UK financial regulators.
Kraken’s entry into the stock trading space follows a trend in the cryptocurrency industry, with FTX US announcing similar plans approximately a year ago (though FTX US is now defunct). While some platforms like Robinhood already offer combined stock and crypto trading services, US-based digital asset exchanges have traditionally focused on crypto-related offerings.
On Sept. 26, Kraken made headlines by securing licenses in Spain and Ireland to offer digital asset services. However, the company is currently facing a civil lawsuit brought by the Australian Securities and Investments Commission (ASIC) for alleged non-compliance with design and distribution obligations for one of its trading products.
It’s worth noting that in February, Kraken reached a settlement with the US Securities and Exchange Commission (SEC), agreeing to pay $30 million in disgorgement, prejudgment interest, and civil penalties. As part of the settlement, Kraken also ceased its staking services and programs for US clients.
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