Kraken Continues Expansion in Europe
Kraken, one of the biggest US-based digital currency exchanges, obtained a license under Markets in Financial Instruments Directive that enables selling derivatives on digital assets across the bloc. It secured the license following the purchase of a Cypriot investment firm that has only just been authorized by the Cyprus Securities and Exchange Commission.
The move further cements Kraken’s regulatory standing in Europe, as it will be able to offer sophisticated financial products to institutional and professional traders throughout EU jurisdictions. The company plans to leverage the region’s growing demand for crypto derivatives.
Strategic Expansion Across Europe
Kraken has been aggressively expanding in the European market over the last two years, securing key regulatory approvals in Spain and Ireland, launching Kraken Custody in the UK, and acquiring a Dutch crypto brokerage in 2024.
The European crypto market, valued at about $7 billion, will grow annually at a rate of 15% until 2030. It is now reported that Kraken is gearing up to become a big player in the region’s evolving crypto landscape, amid an uptick in institutional interest with increasing regulatory clarity.
MiCA Regulations and Market Competition
The European Union has been strengthening the digital asset regulatory requirements by creating a new regulatory regime for crypto markets: MiCA. This means Anti-Money Laundering regulation, regulations on the issuance of tokens, and compliance by stablecoins will provide increased investor protection and market stability.
Several major crypto firms including Crypto.com and OKX have already secured licenses under MiCA. Kraken will go on to directly compete with other exchanges that include Bitstamp, Coinbase, D2X, and Backpack because the demand for its derivatives is increasingly rising.
Crypto Derivatives: How Do They Work and What Are the Risks
Crypto derivatives are financial instruments whose value is derived from that of the underlying digital assets. The products include futures and options, among others, that advanced traders use for hedging against risk, speculation on price movements, and leveraging. Despite high potential returns, these derivatives have considerable risks because of crypto’s highly volatile prices. The platform will ensure, through regulatory oversight under MiFID, that investor protection standards and requirements regarding risk management are met.
Kraken’s Larger Business Moves
But it’s not just about the European expansion. Kraken has been in the news on US soil. It recently brought back its staking service, two years after the company pulled the plug amid a legal tussle with the US Securities and Exchange Commission. Kraken more than doubled its revenue in 2024, reaching $1.5 billion, despite the regulatory hurdles it has faced.
The new MiFID license from Kraken better positions it to double its derivatives presence in Europe and further support its global expansion.
