Crypto Analyzer

The Acquisition of TradeStation Crypto by Kraken to Boost US Licensing

In a strategic move to enhance its regulatory licensing in the United States, cryptocurrency exchange Kraken has announced the acquisition of TradeStation Crypto, the digital assets unit of TradeStation Group. This acquisition is expected to facilitate Kraken’s expansion in the US market and introduce new growth opportunities and product offerings.

TradeStation Crypto currently holds money transmitter and various regulatory licenses across multiple states in the US. However, the Securities and Exchange Commission (SEC) highlighted an issue where the company failed to register a crypto lending product before making it available to investors, resulting in a $1.5 million settlement. Kraken itself faced scrutiny from the SEC last November for allegedly commingling customer funds with its own while operating as an unregistered securities exchange, broker, dealer, and clearing agency. Kraken has since expressed its intention to defend its position in court, emphasizing no fraudulent activities or compromise in customer security occurred.

During a recent conference, Kraken’s chief compliance officer, CJ Rinaldi, emphasized the importance of proactively addressing regulatory concerns and fostering transparency with regulators to prevent unexpected compliance issues. Kraken continues to prioritize compliance measures and staffing, with a focus on setting industry standards through its experiences.

In addition to the TradeStation Crypto acquisition, Kraken launched Kraken Institutional in February, a dedicated brand catering to institutions, asset managers, hedge funds, and high net-worth individuals. Kraken Institutional serves as a comprehensive solution for institutional clients seeking exposure to the cryptocurrency asset class, providing scalable and integrative services under a single platform.

With these strategic moves, Kraken aims to strengthen its presence in the US market, enhance regulatory compliance, and offer comprehensive solutions to a broader range of clients in the cryptocurrency space.