Is Kraken legit or not?

Kraken's operations in the United States have not been smooth. In February 2023, it reached an agreement with the U.S. Securities and Exchange Commission (SEC) for not registering its crypto-staking service, agreeing to pay a $30 million fine and stop providing the service to U.S. customers. In November 2024, the SEC sued Kraken again, saying it mixed client funds and did not register with regulators as stock exchanges, brokers, traders and clearing agencies. This series of events shows that Kraken faces strict scrutiny from regulators in the United States. However, it is also a money service business (MSB) registered by the U.S. Financial Crime Enforcement Network (FinCEN), and is subject to anti-money laundering (AML) and understanding customer (KYC). From this perspective, some of its business in the U.S. meets certain regulatory requirements.

• UK : Kraken has obtained an electronic currency institution (EMI) license issued by the Financial Conduct Authority (FCA). This license allows it to legally issue electronic currencies, provide customers with more convenient deposit and withdrawal services, and improves compliance and competitiveness in the UK market. This shows that in the UK, Kraken operates legally under the relevant regulatory conditions.

• Relatives of Europe : Kraken has obtained a MiFID license operating within the euro zone, which allows it to offer a wider selection of managed derivatives. This means that in some countries in the euro zone, Kraken also has the qualifications to operate legally.

• Canada and Japan : Kraken’s decision to withdraw from the Japanese market (2022) and the Canadian market (2023) is mainly due to the tightening of cryptocurrency regulations in these countries. This indirectly reflects that after the changes in regulations, Kraken's local operations are difficult to fully comply with the new regulatory requirements and cannot maintain legal operations.