When it comes to cryptocurrency exchanges, Kraken is without doubt one of the biggest names around. Established in 2011, the exchange has shown itself to be honest and upstanding – even when rival exchanges faced crippling controversy. While Kraken has been riding a huge wave of momentum in recent years, the latest news might bring that it a halt. The San Francisco-based exchange has announced something of a double blow. Kraken is refusing to respond New York Attorney General’s fresh inquiry into the crypto ecosystem. Plus, Kraken has also announced that it will be leaving Japan, citing growing costs as the reason behind the decision.
The fight for New York
New York appears to be taking aim at the crypto market in 2018, with it writing to 13 different exchanges asking them to participate in a new inquiry. Several of these exchanges have responded positively to the inquiry, but Kraken is taking a different stance. Jesse Powell (Kraken CEO) condemned the inquiry, “Kraken’s BitLicense-prompted exit from New York in 2015 pays another dividend today, I realized that we made the wise decision to get the hell out of New York three years ago and that we can dodge this bullet.”
Kraken was once a New York mainstay, that was until 2015 when in the face of the BitLicense it pulled out of the city. At the time, it labeled the regulatory measure as “a creature so foul, so cruel that not even Kraken possesses the courage or strength to face its nasty, big, pointy teeth.” It’s evident that New York has been aggressive in its attempts to bring the cryptocurrency exchange market under control, but Kraken sees the measures as overly forceful.
Kraken has been forthcoming with governing bodies – generally speaking – but continues to stand against New York’s demands. “Why don’t you try extracting this information from those businesses actually operating in your state?” Powell said. Biting back, the New York Attorney General’s office said, “Legitimate entities generally like to demonstrate to their investors that their money will be protected. This is basic information that credible platforms should all have on hand.” It’s clear that both of these entities are at odds with each other, so we don’t envision Kraken returning to the Big Apple anytime soon.
Kraken says sayōnara to Japan
The battle with New York Attorney General rages on for Kraken, but that isn’t the only issue that the leading cryptocurrency exchange has had to face head-on as of late. Japan is the cryptocurrency capital of the world, with various coins and exchanges chomping at the bit to get a piece of the action. Adapting to the new licensing measures, most exchanges have made the jump – but not Kraken. The company has been operating in Japan since 2014, but has now made the decision to leave the Land of the Rising Sun.
In an official statement, Kraken said, “Suspending services for Japan residents will allow us to better focus on our resources to improve in other geographical areas. This is a localized suspension of service that only affects residents of Japan and does not impact services for Japanese citizens or businesses domiciled outside of Japan.” If that statement is to be believed, Kraken is cutting ties in Japan due to increased costs, but refuses to rule out returning to the market in the future.
What’s prompted the decision to leave Japan is probably recent measures implemented by Japan’s Financial Services Agency (FSA). It has started conducting on-site inspections of exchanges that still remain unregistered. Seen as a wise move in the eyes of the public, licensing measures have become particularly stern in Japan due to the record-breaking Coincheck hack that occurred earlier this year.
Many expected the likes of Kraken to bend to these new licensing measures, but the exchange has actually gone in the opposite direction. Like Binance, Kraken will be gone from Japan in the coming weeks, which means that two of the biggest cryptocurrency exchanges in the world will no longer hold a presence in the country.
What’s next for Kraken?
The rise of Kraken has made it a true force in the cryptocurrency exchange marketplace. But, recent developments might see it take a backseat to other exchanges in the near future. Standing by its decision to leave New York, while citing a redirection of resources for its Japan departure, many will wonder where Kraken goes from here.