Kraken secured a virtual asset service provider (VASP) license from the Central Bank of Ireland on April 18.
The license allows the crypto exchange to operate in the country legally.
Kraken said the approval shows that it adheres to strict anti-money laundering and terrorism financing rules and added that the license is proof of its robust compliance.
Kraken’s head of European operations, Mark Jennings, said:
“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.”
Regulatory uncertainty
The crypto industry has been in dire need of regulatory clarity for years now; however, the top economies in the world — the U.S. and China — have adopted a very cold stance toward the sector.
Although the U.S. regulatory landscape is not closed off like China, which banned digital assets in 2021, the country’s watchdogs — particularly the SEC — have approached the topic of regulation mainly through enforcement.
In recent months, the SEC has taken multiple enforcement actions against some of the most established exchanges in the country, including Kraken and Coinbase.
This has exacerbated the exodus and cross-border expansion of crypto firms as they look for more solid footing.
Europe & Hong Kong
Europe and Hong Kong have become prime locations for cryptocurrency firms due to their proactive approach to regulation.
Europe is on the verge of implementing the Markets in Crypto-Assets (MiCA) framework, which establishes rules for cryptocurrencies and the overall industry. It also places various regulatory requirements on crypto firms and mandates disclosures to bring them up to par with traditional financial institutions.
Additionally, the European Parliament has also introduced the Data Act, which supplements MiCA regulation and establishes protocols for handling sensitive personal and business data.
While the MiCA framework and Data Act have yet to come into force, companies have already begun applying for necessary approvals and are expected to make more announcements in the coming months.
Similarly, Hong Kong is also on the verge of establishing a full regulatory net for the crypto industry and is already processing applications from VASP hopefuls.
Hong Kong officials said recently that more than 80 firms had shown interest in setting up shop in the city-state, while roughly 20 firms have applied for a license already.
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