Lately, crypto-exchange Kraken has repeatedly stressed its intention to focus on the European market. The company states that this decision follows the European Commission’s establishment of the MiCA regulatory framework, which will “allow industry players to confidently invest in the region and provide consumers access to more competitive products and services.”
Recently the exchange successfully registered with the Bank of Spain as a virtual asset service provider (VASP), which allows it to offer cryptocurrency exchange and custodial wallet services to Spanish residents. This follows VASP registrations in Ireland and Italy in recent months. Kraken is also actively pursuing registrations in other European markets.
Kraken’s local subsidiary also received authorisation from the Central Bank of Ireland as an E-Money Institution which enables it to expand EUR fiat services to clients in the 27 EU member states and EEA countries. The exchange also plans to acquire Coin Meester B.V., one of the Netherlands’ oldest registered crypto brokers with access to over 170 cryptocurrencies, in a bid to enter the Dutch market. The deal is still subject to regulatory approvals, including one from the Dutch Central Bank.
“We see a firm foundation for crypto in Europe, which has forward-looking regulation that enables us to grow with confidence. We look forward to continuing our investments in Europe more broadly,” - said Curtis Ting, Kraken’s Vice President of Global Operations.
According to the company’s statement, Kraken now has a market-leading position in liquidity and volume for EUR crypto pairs (95 pairs compared to 22 on Binance according to investing.com).
Meanwhile, Kraken’s main rival Binance has exited multiple European countries this year, despite its stated intentions to focus on compliance with MiCA regulations. The exchange has exited the U.K., Cyprus and the Netherlands, and its bid to acquire the license that would allow the exchange to advertise in Germany was reportedly rejected. The exchange is also under investigation in France for alleged money laundering. Belgium is the only European country where Binance seems to be gaining momentum.
Another U.S.-based exchange, Coinbase, has also received VASP registrations in Italy, the Netherlands and Ireland this year and now is focusing on registering in other countries "that are enacting clear rules" for the crypto industry, namely the EU and UK, Canada, Brazil, Singapore and Australia. Currently, the company is in the final stages of selecting the location of its MiCA hub in the EU. It has also explored an acquisition of FTX’s European entity, according to Fortune.
Seychelles-based OKX has also tried to increase its presence in Europe this spring by registering in France. Its Head of Global Government Relations said at the time that the company is committed to "support new regulatory frameworks as well as to plan for the future with MiCA coming onboard in 2024 for the entire European Union."
Dubai-based crypto exchange Bybit ha also strengthened its foothold in the EU by gaining registration in Cyprus this summer, also saying that it "wholeheartedly supports the regulatory objective of building a cryptocurrency industry that is both compliant, secure, and transparent."
The passing of the MiCA regulations into law this spring has added far greater regulatory clarity in Europe. Compared to the U.S. where crypto regulation looks increasingly like a tangle of competing authorities, aggressive enforcement actions and overall uncertainty, the European market now seems to be a more attractive, safe and welcoming space for crypto businesses – and they clearly realize that. Even if the new rules which will take effect in 2024 are not perfect, they at least provide specific guidelines for companies in the space and set the groundwork for further crypto regulation worldwide.
