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Crypto exchange Kraken plans to diversify its assets with a bold venture into stock offerings.
A new division of the firm, Kraken Securities, will offer trading of stocks listed in the United States and United Kingdom, Bloomberg reported on Wednesday. Kraken aims to roll out these offerings next year.
Kraken Ready to Offer Stocks in the United Kingdom
The exchange has already obtained the permits needed to for UK stock offerings, Bloomberg said. In the United States, an application with the Financial Industry Regulatory Authority (FINRA) awaits a green light.
Founded in 2011, Kraken made its name as a crypto exchange. In pursuing stock offerings in these jurisdictions, Kraken is following the old adage: diversity your assets. Don’t put all your eggs in one basket.
The announcement quicky drew a barrage of comments on X (formerly Twitter). A commenter going by the rubric Crypto Chase wrote, “Smart move.”
Others echoed this view. A commenter named Eric Kasanowski wrote: “bridge the old world and the new. Smart move!”
But another commenter, Dabid, tempered the passion with a bit of historical perspective. His tweet stated:
“Comments saying bottom must be close for Kraken to get into stocks . . . don’t forget Kraken launched their NFT platform right before prices began to capitulate. Anyway the stock process is complicated but if any exchange can do it, it’s Kraken.”
In July, Kraken was one of the exchanges that began re-listing XRP after Ripple’s legal victory against the SEC. This may have helped boost the exchange’s reputation. But other recent events may make some see Kraken in a different light.
Does Kraken’s Recent Record Help Its Prospects?
Many may welcome Kraken’s move into stock offerings. Crypto exchanges everywhere have fought for mainstream acceptance. And tried hard to cast off the stigma of association with money laundering and other crimes.
In March, Kraken founder Jesse Powell, who stepped down from his role as CEO last year but stayed on the firm’s board, became the subject of a law enforcement probe.
The Federal Bureau of Investigation carried out a search warrant at Powell’s Los Angeles home. They reportedly had concerns over charges of hacking. Charges surfaced of Powell having improperly accessed computer accounts of the nonprofit firm Verge, of which he was founder.
A lawyer for Powell denied his client did any wrong. The hacking and cyberstalking are not proven facts, merely allegations.
A 2019 lawsuit against Kraken by a former employee, alleging wrongful termination, ended in a settlement in 2021.