Cryptocurrency exchange Kraken has revealed that it has secured a virtual asset service provider (VASP) license from the Central Bank of Ireland.
According to Kraken, the approval was granted on the 18th of April.
VASP Registration Received
With the license secured, Kraken can now legally operate in the country of Ireland. Kraken released a statement announcing the news and added that the approval is a testament to the fact that the exchange adheres to strict anti-money laundering and terrorism financing rules. It also added that receiving the license showed that it is committed to meeting all compliance requirements. Mark Jennings, the head of Kraken’s European operations, stated,
“Clear and effective regulation is essential for the mainstream adoption of cryptocurrencies. As we bring innovative products and services to market, we’re committed to continuing to work with European regulators to operate compliantly under sensible, forward-looking crypto asset regulation. We’ve always put our clients first and believe in offering a compliant trading experience that leverages industry-leading customer service, robust security protocols, and a market-leading position in liquidity and volume for EUR crypto pairs.”
Growing Regulatory Uncertainty
For several years, the crypto industry has been crying out for better regulatory clarity. However, the biggest economies in the world, namely the United States of America, along with China, have adopted a relatively hostile stance towards the entire sector. The regulatory landscape in the United States is still more open than in China, which had banned digital assets entirely in 2021. However, the Securities and Exchange Commission has approached regulation with a heavy hand, often through enforcement.
As a result, the SEC has taken action against some of the biggest and most well-established exchanges in the country, such as Coinbase and Kraken. This has resulted in a mass exodus as platforms look to expand and move into markets that offer better footing and regulatory clarity. In fact, Coinbase is one of the platforms that is looking to relocate.
Alternate Destinations
As a result, Europe and Hong Kong have emerged as prime locations for cryptocurrency firms, thanks to a more friendly and proactive approach to regulation. Europe is on the verge of implementing the Markets in Crypto Assets (MiCA) framework. The MiCA framework looks to establish clear rules for crypto assets and the industry in general. It also imposes regulatory requirements on firms, mandating several disclosures in an effort to bring them on par with traditional financial institutions.
Europe has also introduced the Data Act, which seeks to establish clear protocols when it comes to sensitive personal and business data. While both are yet to come into force, companies have already started to apply for the necessary approvals and are scheduled to make further announcements in the coming months. Hong Kong is also establishing a robust regulatory system for the crypto ecosystem. Additionally, it is already processing applications from several firms looking to get a VASP license. Officials have stated that over 80 firms have registered an interest in settling up operations in the city-state.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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