Kraken Secures E-Money License in EU, Expands Virtual Asset Services in Spain

Key Takeaways

Kraken receives E-Money Institution (EMI) license from the Central Bank of Ireland.

The company also registers as a Virtual Asset Service Provider (VASP) in Spain.

These authorizations are part of Kraken’s European expansion strategy.

Regulatory Milestones in European Expansion

San Francisco-based cryptocurrency platform Kraken has obtained an E-Money Institution (EMI) license from the Central Bank of Ireland, according to a Business Wire release dated September 26, 2023. Concurrently, Kraken has also secured registration with the Bank of Spain as a Virtual Asset Service Provider (VASP). These developments underscore Kraken’s commitment to regulatory compliance and its focus on European markets.

Enhanced Services in the EU and Spain

The EMI license, granted to Kraken’s Irish subsidiary, allows the firm to broaden its EUR fiat services in collaboration with European banks. This will benefit clients in the 27 European Union (EU) member states and European Economic Area (EEA) countries. In Spain, the new VASP registration enables Kraken to offer cryptocurrency exchange and custodial wallet services to Spanish residents.

Strategic Importance

Curtis Ting, Kraken’s Vice President of Global Operations, stated, “Today’s announcement marks another important milestone in our European expansion strategy.” He emphasized the company’s confidence in the European regulatory landscape and expressed gratitude towards the Central Bank of Ireland and the Bank of Spain for their “constructive approach to regulating industry growth.”

Company Overview

Founded in 2011, Kraken has a longstanding reputation for robust security and client service. Over the past year, the company has diversified its offerings, launching an NFT marketplace, the Kraken Pro advanced trading interface, and a revamped consumer web experience. Kraken serves more than 10 million clients globally, offering trading in over 200 digital assets and six national currencies.

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Kraken Announces PayPal USD (PYUSD) Trading Starting August 21

Kraken, a prominent cryptocurrency exchange, has announced the inclusion of a new financial instrument to its platform. Starting August 21, Kraken will support trading for PayPal USD (PYUSD), a significant move that encapsulates the melding of traditional and digital financial systems.

The decision by Kraken follows the unveiling of PYUSD by payment giant PayPal, marking another step in the adoption and integration of stablecoins in major exchanges.

PayPal’s Foray into the Stablecoin Realm

On August 7, 2023, in San Jose, California, PayPal (NASDAQ: PYPL) took a significant step in digital finance with the launch of its U.S. dollar-denominated stablecoin, PayPal USD (PYUSD). This digital currency is designed to reshape payments in web3 environments and other digitally native settings.

Features and Functionality

PayPal USD’s design prioritizes the benefits stablecoins bring to payments. Ensured by a 100% backing through U.S. dollar deposits, short-term U.S Treasuries, and similar cash equivalents, this stablecoin promises a 1:1 redemption rate for U.S. dollars. Issued by Paxos Trust Company, it provides the following functionalities:

Transfer PYUSD between their PayPal accounts and compatible external wallets.

Conduct person-to-person payments using PYUSD.

Fund purchases at checkout using PYUSD.

Convert between PayPal-supported cryptocurrencies and PYUSD.

Highlighting the importance of this new asset, PayPal CEO, Dan Schulman, stated, “Our commitment to responsible innovation and compliance, along with our history of pioneering unique experiences for our clientele, is the groundwork for digital payments growth via PayPal USD.”

Stablecoins’ Growing Profitability:

Stablecoins, as underscored by Tether’s impressive Q2 2023 operational profit of over $1 billion, continue to etch a significant and profitable place in the financial domain. PayPal’s entry indicates the vast potential this sector holds.

Blending the Worlds of Fiat and Web3

PayPal USD aims to be more than just another stablecoin. It aspires to be a conduit, connecting the traditional world of fiat to the dynamic realm of web3. Built as an ERC-20 token on the Ethereum blockchain, it is designed to be accessible to a diverse range of developers, web3 apps, wallets, and exchanges.

The coin’s design intends to diminish payment friction in virtual landscapes, expedite transfers, and establish direct financial conduits for developers and creators. Moreover, its integration with the web3 ecosystem ensures its compatibility with platforms like Venmo from day one.

Transparency and Regulation

Ensuring credibility and trust, Paxos Trust Company, under the regulatory eye of the New York State Department of Financial Services, issues the PayPal USD. Furthermore, from September 2023, Paxos will roll out a monthly Reserve Report detailing the reserves underpinning the stablecoin. An independent accounting firm will provide third-party attestation, in line with the guidelines set by the American Institute of Certified Public Accountants (AICPA).

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61,216.6 ETH from Ethereum ICO Address Moved to Kraken

An Ethereum (ETH) address associated with the initial coin offering (ICO) in 2015 has transferred a staggering 61,216.6 ETH, equivalent to $116 million, to the Kraken exchange a few hours ago. This transaction marks the first movement of these funds since their acquisition eight years ago.

source: etherscan

The address in question received 61,216.6 ETH from the Ethereum genesis block on July 30, 2015. At the time of the ICO, the value of these tokens was a mere $19,038, with each ETH priced at $0.311. Fast forward to today, and the same amount of ETH is worth an astounding $116 million, showcasing the tremendous growth and adoption of Ethereum over the years.

source: etherscan

The transfer of such a substantial amount of ETH to Kraken could indicate a potential huge sale pressure or a strategic move by the original ICO participant. However, the exact intent behind this transaction remains unknown.

It’s worth noting that the transactions could influence Ethereum price given the substantial amount involved.

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CoinMarketCap Crypto Report: Top 20 Exchanges Mark a 36% Drop in Spot Trade Volume from Previous Quarter

In the first half of 2023, the cryptocurrency market has seen significant shifts in exchange activities, according to a comprehensive analysis by CoinMarketCap. The report examines the overall health, size, and activity level of the crypto market, considering both centralized and decentralized exchanges.

The top 20 exchanges contributed $1.67 trillion in total spot trade volume in Q2 2023, marking a 36% drop compared to the previous quarter. This decline indicates a slowdown in market activities, following Q1’s active trading spurred by Bitcoin’s price doubling.

Binance maintained its dominant position in the market throughout H1 2023, with a total spot trading volume share of 59.99%. The top five exchanges, including Binance, Coinbase, and Kraken, accounted for approximately 85% of the total spot market volume.

The market continues to offer a healthy number of trading pairs and available coins, with a steady increase in new listings. Binance dominated liquidity in the large-cap space, focusing its new listings on high-quality mainstream coins.

BitForex and Bitget were among the most active in adding new coins during the memecoin season from April to June 2023.

Binance ($57 billion), OKX ($10 billion), and Bitfinex ($10 billion) exhibited the highest amount of Proof of Reserve Assets. Despite recent market FUD leading to capital outflows from Binance, the exchange still maintains a healthy amount of Proof of Reserve assets.

In H1 2023, the majority of exchange tokens achieved net positive returns, although most were unable to outperform Bitcoin (+182% YTD).

Decentralized exchanges (DEX) saw their peak trading volume in March, with a total DEX volume of $189 billion in Q2, a 24% decrease compared to Q1. Uniswap dominated the DEX market with a 57.5% market share, and its monthly volume has been on par with Coinbase’s spot volume.

The DEX to CEX ratio has increased to around 1:8, attributed to advancements in DEX products, regulatory concerns about CEX, lower gas fees, and a higher proportion of crypto-native participants.

Approximately 80% of the DEX trade volume occurred on Ethereum and its Layer2 chains in H1 2023. However, BNB has been rapidly gaining a larger share of the DEX trading market in Q2.


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US Court Backs IRS in Part Against Kraken Over Tax Rules

The United States District Court, Northern District of California, has partially upheld a summons issued by the Internal Revenue Service (IRS) to Payward Ventures, Inc. and its subsidiaries, collectively known as “Kraken“. Kraken, a prominent online crypto exchange, has been under scrutiny for its compliance with tax regulations.

The court order comes after Kraken failed to comply with an IRS summons, leading to the United States initiating legal action to enforce it. The court’s decision to grant the petition in part and deny it in part marks a crucial juncture in this ongoing case.

Kraken, known for its global reach, offers its digital currency exchange services to users in over 190 countries. The platform provides a variety of account levels, including Starter, Express, Intermediate, and Pro, each requiring different levels of user verification. While the Starter and Express accounts offer limited services and require lower levels of verification, the Intermediate and Pro accounts offer a wider variety of transaction types and higher withdrawal limits, necessitating additional user verification.

The IRS investigation into Kraken was triggered by concerns over tax compliance issues related to cryptocurrency. These concerns were highlighted in reports by the Government Accountability Office (GAO) in 2013 and the Treasury Inspector General for Tax Administration (TIGTA) in 2016. The reports identified several tax compliance risks associated with virtual currencies, including underreporting of income and tax evasion.

In response to these concerns, the IRS expanded its Electronic Payment Systems Initiative (EPSI) to address U.S. taxpayers who use virtual currencies for tax avoidance purposes. As part of this initiative, the IRS established a Virtual Currency Issue Team (VCIT) to study the issue and consider the compliance impact related to virtual currencies. The summons to Kraken is part of the tools being used in this investigation.


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ZachXBT’s Defamation Lawsuit Receives Over $1 Million in Donations as Prominent Figures Rally Support

In a surprising turn of events, renowned on-chain analyst ZachXBT has exceeded his initial fundraising target, amassing a staggering $1,055,233 in donations, according to Nansen data. This remarkable achievement has been made possible through contributions from various entities and influential figures within the crypto industry.

Prominent supporters include Binance CEO Changpeng Zhao, Coinbase Cloud’s protocol lead Viktor Bunin, CertiK, Justin Sun, Kraken co-founder Jesse Powell, and Polygon’s founder Sandeep Nailwal.

Changpeng Zhao, in a tweet, expressed Binance’s commitment by pledging $50,000 to the cause, while urging ZachXBT to persevere in his fight and emphasizing the importance of transparency in the industry.

Jesse Powell also expressed gratitude for ZachXBT’s work and pledged a donation of 10 ETH.

Brown Rudnick partner Palley, along with Jess Meyers and the team at Brown Rudnick, expressed their honor in representing ZachXBT’s mission to speak truth to power.

Sandeep Nailwal, founder of Polygon, praised individuals like ZachXBT for their contributions and pledged 5 ETH to support the legal battle.

The lawsuit filed by Huang accuses ZachXBT of damaging his reputation through false allegations made in an article published by ZachXBT approximately a year ago. Huang vehemently denies the allegations and is determined to prove their falsity through the legal proceedings. In a recent tweet, Huang stated that he initially expected an apology and expressed his intention to donate any monetary compensation received to charity.

Huang Licheng(Jeffrey Huang),known as MachiBigBrother on Twitter, a former American-Taiwanese musician and technology entrepreneur, had been involved in a controversial incident in 2018 when he allegedly misappropriated 22,000 ETH from Formosa Financial. Furthermore, over the past four years following the collapse of Formosa Financial, Huang has been associated with a series of unsuccessful token launches and NFT projects.

In response to the lawsuit, ZachXBT expressed disappointment and asserted that the legal action taken against him is an attempt to stifle free speech. He remains resolute in his commitment to fight back and defend the principles of free expression.

To cover the legal expenses and protect the freedom of speech, ZachXBT has set up a donation wallet address for his followers and the wider community.This legal dispute has garnered significant attention within the industry, with key players showing their support for ZachXBT’s cause. The influx of donations and the rallying behind the principle of free speech highlight the crypto community’s dedication to transparency, accountability, and the pursuit of truth.


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Kraken Fights IRS Over Customer Information

Kraken, the popular crypto exchange, is contesting the United States Internal Revenue Service’s (IRS) demand for critical exchange user information, citing it as an “unjustified treasure hunt.” According to Bloomberg, the crypto exchange has requested federal court intervention in San Francisco to ask the IRS to back off from its demand for customer information.

Kraken’s pushback against the IRS comes in response to the agency’s February summons, which demanded additional user information to identify Kraken accounts that did at least $20,000 of cryptocurrency trading in any single year between 2016 and 2020. The exchange claims that the IRS has gone “far beyond” its intrusive summons, and its demands for customer information are not justified.

Kraken’s request for federal court intervention cited Coinbase’s case from 2017, where the tax agency scaled back its initial demand after Coinbase’s continuous refusal. In the Coinbase case, U.S. District Judge Jacqueline Scott Corley decided that the summons sent to more than 14,000 customers of the exchange wasn’t too intrusive because the IRS had a valid reason to look into taxpayers who might not be disclosing their Bitcoin (BTC) gains.

Kraken’s lawyers claimed that the IRS has gone “far beyond” the rules set by Judge Corley in the Coinbase case. Kraken joined Coinbase in its efforts to push back against growing regulatory scrutiny by American regulators. Coinbase is currently fighting its own battle against the U.S. Securities and Exchange Commission (SEC) over offering crypto staking services.

The SEC alleged that staking services offered by Kraken, Coinbase, and other platforms violate securities law. While Coinbase settled with the SEC for $30 million for offering staking services, it has decided to head to court for its IRS battle.

The growing regulatory scrutiny has become a growing concern for crypto companies in the U.S. The likes of Coinbase CEO Brian Armstong and USD Coin issuer Circle CEO Jeramy Allaire have warned that the growing pushback from regulatory bodies will force budding crypto companies to move offshore.

In conclusion, Kraken is fighting against the IRS’s demand for customer information, citing it as an “unjustified treasure hunt.” The exchange has requested federal court intervention, pointing out that the IRS has gone “far beyond” its intrusive summons. With growing regulatory scrutiny, Kraken and Coinbase’s pushback against American regulators could become a growing trend in the crypto industry, with more companies moving offshore to avoid regulatory barriers.


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Kraken Irish Subsidiary Awarded VASP Authorization by Central Bank of Ireland

Kraken, one of the world’s leading cryptocurrency exchanges, has received some exciting news from its Irish subsidiary, Payward Europe Solutions. On April 18th, the Central Bank of Ireland awarded the company virtual asset service provider (VASP) authorization, making it only the third cryptocurrency outlet to be registered in the European Union (EU).

This authorization comes at a critical time for Kraken and other companies operating in the EU’s cryptocurrency market. The EU is set to conduct its final vote on the Markets in Crypto Assets (MiCA) regulation, which has been highly anticipated in the industry. The preliminary voting for the MiCA legislation showed overwhelming bipartisan support, indicating that it is likely to pass.

If the MiCA regulation is approved, it will require any company operating as a crypto assets service provider (CASP) in the EU to register with one of the union’s 27 authorized regulators. This means that any company that provides services like custody, exchange, or issuance of cryptocurrencies will have to be authorized by the EU regulators.

Kraken has positioned itself well by obtaining the VASP authorization for its Irish subsidiary Payward Europe Solutions. The company joins the ranks of other registered cryptocurrency outlets like Gemini and Coinbase. Gemini received its VASP authorization in July 2022, while Coinbase received its authorization in December of the same year.

Kraken has been one of the most successful cryptocurrency exchanges in the world since its inception in 2011. The company has a strong track record of providing reliable and secure trading services to its users. In recent years, Kraken has expanded its services to different parts of the world, with subsidiaries operating in different countries.

Payward Europe Solutions, which is registered in Dublin, Ireland, is one of Kraken’s most important subsidiaries. The company offers trading services for different cryptocurrencies, including Bitcoin, Ethereum, and Litecoin. With the VASP authorization, the company is now authorized to provide these services in compliance with the EU’s regulatory requirements.

The MiCA regulation is expected to bring significant changes to the cryptocurrency market in the EU. It will improve investor protection by setting high standards for cryptocurrency service providers. The regulation will also create a level playing field for all players in the industry, as it will apply to all companies that provide crypto services.

Overall, Kraken’s VASP authorization for its Irish subsidiary Payward Europe Solutions is a significant milestone for the company. The authorization shows that Kraken is committed to complying with the EU’s regulatory requirements and providing top-notch services to its users. It also positions the company well in the highly competitive EU cryptocurrency market.


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Kraken Halts ACH Deposits and Withdrawals via Silvergate

In a move that has disrupted the cryptocurrency industry, Kraken, one of the world’s largest cryptocurrency exchanges, has announced that it will no longer support ACH deposits and withdrawals via Silvergate, citing difficulties with the automated clearing house. According to reports, Kraken sent an email notice to its users on March 22, notifying them that ACH deposits and withdrawals would no longer be available from March 27.

Kraken has assured its users that no other services would be affected by this change, including ACH instant purchases via Online Banking. The exchange has also advised its users to use alternative funding options, such as MVB Bank for Fedwire deposits and withdrawals, and other instant purchase options, to ensure an uninterrupted funding experience.

Kraken has joined the growing list of cryptocurrency exchanges that have halted their ACH deposits and withdrawals via Silvergate. The Winklevoss brothers-founded exchange, Gemini, also stopped accepting customer deposits and processing withdrawals through Silvergate ACH and wire transfers on March 2.

Silvergate is one of the crypto-friendly U.S. banks that collapsed in early March, alongside other lenders like Silicon Valley Bank, posing major challenges for the cryptocurrency industry. Many cryptocurrency firms hold significant exposure to these banks, which has led to disruptions in the cryptocurrency market.

Kraken joined the Silvergate Exchange Network in 2019, which allowed the exchange to offer deposits and withdrawals in U.S. dollars from Silvergate accounts. Kraken has assured its users that its team is working to make ACH funding available again as soon as possible.

Kraken is a cryptocurrency exchange founded in 2011 by Jesse Powell, who is currently the CEO. The exchange is based in San Francisco, California, and is one of the largest cryptocurrency exchanges in the world, trading over $1 billion daily, according to data from CoinGecko.

Silvergate is a U.S.-based bank that is known for its cryptocurrency-friendly policies. The bank is based in La Jolla, California, and was founded in 1988. In 2019, Silvergate launched the Silvergate Exchange Network, which allows cryptocurrency exchanges to offer deposits and withdrawals in U.S. dollars from Silvergate accounts.

Automated clearing house (ACH) is an electronic funds transfer system that allows businesses and consumers to send and receive payments electronically. ACH transfers are commonly used for direct deposit, payroll, and bill payments. ACH transfers are typically slower than wire transfers but are more cost-effective.

The cryptocurrency industry has faced significant challenges in recent years due to the lack of regulatory clarity and the volatile nature of cryptocurrencies. The industry has also faced challenges with banking relationships, as many traditional banks are hesitant to work with cryptocurrency firms due to concerns over money laundering and fraud. As a result, many cryptocurrency firms have turned to banks like Silvergate, which have more favorable policies towards cryptocurrencies.


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What the U.S. Congress Decides on Crypto Will Ultimately Overstepping their authority

The policy expert for the cryptocurrency advocacy group Blockchain Association says that despite attempts to police cryptocurrency through enforcement actions, United States financial regulators “are bound by legal reality,” and Congress will ultimately decide what regulations should be put in place for cryptocurrencies.

Jake Chervinsky, the chief policy officer of the organization, contributed his thoughts to a lengthy Twitter conversation on the topic of the current status of crypto policy on February 14.

He made the observation that the Securities and Exchange Commission as well as the Commodity Futures Trading Commission “do not have the ability to completely oversee cryptocurrency.”

Given the ideological divide that exists between the House Republicans and Senate Democrats, Chervinsky is of the opinion that a compromise on the crypto legislation is “unlikely.” He said that the Securities and Exchange Commission and the Commodity Futures Trading Commission had exceeded their powers in an effort to “get things done” without Congress.

Chervinsky issued a plea for the sector to maintain its composure in the wake of the recent flurry of action from the SEC, which he referred to as “crypto’s biggest opponent.” As an example, Chervinsky cited the SEC’s crackdown on staking services.

The settlement that the SEC reached with the cryptocurrency exchange Kraken on February 9, which forbade Kraken from ever selling staking services to consumers in the United States, has been publicly criticized by SEC Commissioner Hester Peirce.

Peirce expressed his disagreement with the majority opinion in a statement dated February 9, in which he said that regulating a growing business via enforcement “is neither an effective or equitable manner of governing” the industry.

It was proposed by Chervinsky that litigation is one method the cryptocurrency business may press for appropriate legislation. Chervinsky said that the court plays a key role in influencing policy that has been “ignored.”

Coinbase, a cryptocurrency exchange, is also the subject of an SEC investigation that is similar to the one that led to Kraken’s settlement.

A more stronger position has been adopted by Coinbase CEO and co-founder Brian Armstrong, who believes that it would be disastrous for the United States to do away with staking for cryptocurrencies.

In a tweet dated February 12, Armstrong contended that Coinbase’s staking services are not securities and said that he would “gladly defend this in court if it were necessary.”

The decisions that judges make in important cases establish new standards in the law. If such a case were to be taken before a court and the judge concluded that Coinbase’s staking services did not qualify as securities, then other cryptocurrency businesses who are in a situation comparable to Coinbase’s may utilize the precedent as part of their defense.


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Bitcoin (BTC) $ 28,091.53 3.88%
Ethereum (ETH) $ 1,728.24 3.20%
Litecoin (LTC) $ 67.77 2.78%
Bitcoin Cash (BCH) $ 243.25 2.53%