Cryptocurrency exchange Kraken has received approval from the UK’s Financial Conduct Authority (FCA) to operate as an Electronic Money Institution (EMI). This is a major step in Kraken’s efforts to grow in the UK market and provide more financial services to its users.
Kraken operates in the UK under its local branch, Payward Ltd. With this new licence, the company is now one of 31 crypto firms on the FCA’s official crypto asset register.
This means that Kraken can issue electronic money, making it easier and faster for UK customers to deposit and withdraw funds.
The approval also allows Kraken to introduce new financial products aimed at the increasing number of people using cryptocurrency in the UK.
According to Kraken’s UK General Manager, Bivu Das, the EMI licence will help Kraken integrate further into the UK’s financial system.
“This approval is a key milestone for Kraken, allowing us to develop new financial services that meet the growing demand for crypto solutions in the UK”, Das said.
The decision comes at a time when more UK investors are getting involved in cryptocurrency. Recent FCA data shows that around seven million UK adults, or about 12% of the country’s adult population, currently own cryptocurrency.
This increase in crypto adoption suggests that more people are viewing digital assets as part of their investment portfolios.
Kraken’s strong position in the UK market
Kraken has been active in the UK for over a decade. It was the first major exchange to introduce Bitcoin-to-pound (BTC/GBP) trading pairs in 2014. Over the years, it has continued to grow, and today it supports around 300 cryptocurrencies for UK traders.
With the new EMI licence, Kraken can expand its fiat currency services, making transactions faster and increasing liquidity for its users.
This approval follows other recent regulatory successes, including a Markets in Financial Instruments Directive (MiFID) licence from Cyprus. The MiFID licence allows Kraken to provide regulated derivatives trading for users across Europe.
Kraken has also been making progress in the United States. The company recently relaunched its on-chain staking services in 37 US states, showing its commitment to following regulations while continuing to offer new services.
In addition to expanding its services, Kraken is also playing a role in the ongoing FTX bankruptcy case. The exchange is set to help process repayments to FTX creditors in May 2025, further establishing itself as a key player in the cryptocurrency industry.
Looking ahead, Kraken plans to introduce new crypto and fiat services in the UK. These services will help users manage liquidity and use digital assets in their everyday financial activities.
Das emphasised the importance of the UK market, stating, “The UK is a critical market for Kraken. This licence allows us to develop new products that give British investors more useful ways to interact with cryptocurrency”.
Kraken’s future plans and IPO considerations
Kraken is also preparing for an Initial Public Offering (IPO) in the United States, which could take place as early as 2026. The company believes that current US regulatory conditions are improving and sees an opportunity to take Kraken public.
However, these IPO plans are not yet final and could change depending on market conditions and regulations. Kraken’s confidence in moving forward with an IPO has grown following its recent legal victory against the US Securities and Exchange Commission (SEC).
In November 2023, the SEC filed a lawsuit against Kraken, accusing the exchange of operating without proper registration and mixing customer funds with company funds.
Kraken challenged these claims, and in a recent legal agreement, the SEC dropped the case with prejudice. This means the case cannot be refiled, and Kraken does not have to admit to any wrongdoing or pay penalties. The company can continue operating as before, giving it greater stability ahead of its potential IPO.
Aside from legal and regulatory developments, Kraken has been actively launching new services and technologies. It recently introduced Kraken Pay, a payment service that allows users to make transactions more efficiently.
The company has also developed its own Layer 2 blockchain network, Ink, which aims to improve transaction speeds and lower costs. However, Ink is currently facing decentralisation challenges, and its developers have 140 days to resolve these issues before it can fully comply with industry standards.
Kraken continues to grow as a global exchange, handling around $1.5 billion in daily trading volume. A large portion of this volume comes from stablecoin transactions, which play a major role in maintaining liquidity in the crypto market.
While Europe has recently tightened regulations on stablecoins, the UK has taken a more flexible approach. This allows Kraken to operate with fewer restrictions compared to exchanges in the European Union.
With the UK being one of the company’s largest markets for GBP-based trading, the new EMI licence puts Kraken in a strong position to continue expanding its services.
What’s next for Kraken?
Kraken’s new regulatory approval in the UK is a major step in its long-term growth strategy. With more UK investors entering the crypto space, the company plans to launch new products that make it easier for people to buy, sell, and manage digital assets.
At the same time, Kraken is keeping an eye on global expansion opportunities. The company’s recent regulatory approvals in Europe and the US suggest it is committed to operating within legal frameworks while offering a wide range of services to its users.
With an IPO on the horizon, Kraken is looking to strengthen its position as one of the leading cryptocurrency exchanges in the world. The resolution of its SEC lawsuit has removed a major hurdle, allowing the company to focus on growth and innovation.
Kraken’s future product launches, combined with its new EMI licence, show that the exchange is taking steps to ensure it remains competitive in an industry that is constantly evolving.
By securing regulatory approvals and developing new financial tools, Kraken aims to become a key bridge between traditional finance and the world of digital assets.
