Crypto exchange Kraken revealed Tuesday that it had obtained the license to operate as a virtual asset service provider (VASP) from the Central Bank of Ireland.
Kraken fulfilled various conditions required to obtain the license after implementing effective measures to prevent money laundering and terrorism financing. Kraken also had to agree to continuous monitoring by the Irish government.
Kraken’s VASP authorization comes as the European Union is about to vote on the Markets in Crypto Assets (MiCA) regulation, which is expected to pass with strong bipartisan support. If it does, any company operating as a crypto asset service provider (CASP) in the EU must register with one of the union’s 27 authorized regulators.
Kraken senior managing director for global operations Curtis Ting said obtaining a VASP license is less demanding than acquiring a BitLicense, a certification required by digital asset companies in New York.
During an interview with Fortune, Ting said that the Irish regulatory authorities and Ireland understand the crypto industry well. He added that the authorities also had taken proactive steps to enact clear and sensible laws.
In agreement with Ting’s statement, head of European operations Mark Jennings wrote in a company blog post, expressing his appreciation for the Bank of Ireland’s decision, saying clear and effective regulation is critical to widespread crypto adoption.
Crypto industry to leave U.S.
Ting said that the departure of the crypto industry from the U.S. had been ongoing for almost two years. However, it has gained more attention recently due to the government’s legal actions against various companies in the field.
He also pointed out that this trend has become more prominent recently and is seen as a counter to other jurisdictions that have adopted a more disorderly approach.
Per Ting, the EU’s attempts to regulate the crypto industry through legislation, such as a crypto bill that will be voted on in the first half of 2023, is a prominent reason companies are interested in moving to Europe.
This approach contrasts with the U.S. Securities and Exchange Commission’s policy of regulating through enforcement, which many in the industry have criticized. Ting said that the industry’s shift to Europe is based on the clarity provided by the regulatory framework.
Coinbase CEO Brian Armstrong has echoed similar views with Ting. He suggested that the exchange may relocate from the U.S. if the regulatory landscape for the industry fails to provide sufficient clarity. During Fintech Week in London, Armstrong told CoinDesk he was open to relocating the company if necessary.
“I think the U.S. has the potential to be an important market for crypto, but right now we are not seeing that regulatory clarity that we need,” the 40-year-old said.
Previously, Kraken has been charged by the SEC for not registering the sale and offer of its crypto asset staking-as-a-service program, which the SEC deemed as securities under its jurisdiction.
The SEC has ordered Kraken to halt the operation of its staking program for its U.S. clients and pay $30 million in prejudgment interest, disgorgement and civil penalties.
According to SEC’s division of enforcement director Gurbir Grewal, Kraken not only provided investors with unrealistic returns but also had the option not to provide any returns.
