Kraken secures MiFID license and a chance to offer compliant derivative products in the Euro area

Kraken, one of the most active centralized exchanges for European traders, has secured a Markets in Financial Instruments Directive (MiFID) license. The new regulated status will expand the derivative products available to Euro-area clients. 

Kraken has secured a Markets in Financial Instruments Directive (MiFID) license to offer financial solutions in the Euro area. The license was obtained through the acquisition of a MiFID-accredited firm from Cyprus, recently gaining a license from the Cyprus Securities and Exchange Commission (CySEC). 

Along with the new license, Kraken will remain MiCA compliant by removing Tether (USDT) and other stablecoins with no bank-based reserves. Until recently, Kraken was one of the few carriers of fiat pairings for USDT.

Kraken to offer advanced derivative products

The new compliant status means Kraken can offer more derivative products to tap the growing demand of European traders. Selected EU markets will gain access to regulated derivative products, suitable for advanced crypto traders. 

‘As we continue to expand our services across the globe, our focus on the European market remains a top priority,’ said Shannon Kurtas, Kraken Co-GM of Pro & Exchange. 

Kraken has always provided services for the EU market, striving to remain compliant by only offering regulated products. For that reason, Kraken’s pairs are one of the fiat off-ramps for crypto traders. Kraken remains an important hub for spot trading but has been building its capacity to offer advanced trading opportunities. 

The exchange has previously acquired a UK-based FCA-regulated company, Crypto Facilities, which later transformed into one of the first licensed crypto futures platforms in the UK. Kraken already offers over 300 trading pairs in its derivative market, preserving the more complex and riskier products for its Pro version.

Kraken’s website takes more than 10% of its traffic from Germany and France, two of the largest Eurozone markets. Nearly 40% of the exchange’s traffic comes from the USA, where the exchange is also one of the go-to markets to trade between stablecoins and fiat. 

Kraken moves to quarterly reporting 

Kraken remains one of the top 20 centralized exchanges, aiming to grow its influence in the new year. In 2024, the bull market expanded Kraken’s earnings to a total of $1.5B, an increase of 128% year-on-year. 

The platform carries more than $42.8B in assets after expanding its influence over the years. Kraken started with just $27M in primary capital, soon becoming a staple in the crypto space. Due to its reliability, Kraken was chosen as one of the distributors for FTX claims and is expected to handle fund distribution by March. 

Due to its growing influence and exposure, Kraken will start posting quarterly results and publish a regular Proof of Reserves in a bid to present itself as one of the most secure and reliable crypto exchanges. Enhanced transparency and reporting are also part of the EU package for MiFID-regulated companies. 

Kraken still carries $4.2B in daily trading volumes through a mix of blue-chip assets and rapid listing of newly launched tokens. The exchange carries 2.5M funded accounts for its spot market. Kraken is also among the exchanges with a detailed anti-scam policy, though often creating complaints about locking and scrutinizing user accounts.

Kraken grows its L2 chain

Alongside the regulated and centralized activities, Kraken is also building its presence as a decentralized hub. The Ink chain is a L2 network, which has already caught up with Arbitrum and Optimism in becoming Stage 1 based on decentralization criteria. The Kraken chain has been more active in the past month, and it is already paying higher blob fees to Ethereum as activity picks up. 

Ink acquired Stage 1 status in the last week of January, meaning it can work as a censorship-free network. The chain will continue to carry USDT in its new cross-chain form, USDT0, available for decentralized trading only. 

The Ink L2 chain carries $4.27M in total value locked, while still growing its collection of DeFi apps. Ink relies on Velodrome and InkySwap for most of its DEX activity.

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