One of the biggest and most established cryptocurrency exchanges, Kraken, said on Tuesday that it has obtained an Ireland license to operate as a virtual asset service provider.
The license enables the cryptocurrency exchange to run lawfully throughout the nation.
The license is evidence of Kraken’s tight compliance, according to the company, which is demonstrated by the permission that it follows anti-money laundering and counter-terrorism funding regulations to the letter.
It is a comparatively less rigorous permit to receive than, for example, a BitLicense, New York’s certification for digital assets companies, said Curtis Ting, Kraken’s senior managing director for global operations.
In an interview with Fortune, he said that “Ireland and the Irish regulatory authorities understand cryptocurrency and are proactive in establishing rules that make sense and have enough clarity.”
Mark Jennings, the director of operations for Kraken in Europe, said:
“Clear and effective regulation is necessary for cryptocurrencies to be adopted by the general public. We’re dedicated to working with European regulators to maintain compliant operations under rational, futuristic crypto asset legislation while we sell cutting-edge goods and services.”
Yet, the timing of its release coincides with a broader crypto crackdown in the U.S. that has led businesses to turn elsewhere. Kraken’s regulatory permission in Ireland is not the company’s first in an EU member state, Ting mentioned a digital assets license in Italy.
Kraken recently settled with the Securities and Exchange Commission for running its staking business, a service that allowed users to place cryptocurrency in escrow in exchange for profits that could exceed 21% annually, according to the SEC.
The world’s two largest economies, the U.S. and China, have taken a highly hostile approach against the sector, even though the crypto business has long needed regulatory clarification.
The U.S. regulatory environment is not as walled off as China’s, which forbade digital assets in 2021, but the nation’s watchdogs, notably the SEC, have mostly focused on enforcement when addressing the issue of regulation.
Several of the most reputable exchanges in the US, including Kraken and Coinbase, have been the target of many enforcement proceedings by the SEC in recent months.
Due to their aggressive attitude to regulation, Europe and Hong Kong have emerged as top destinations for crypto businesses.
Markets in Crypto-Assets (MiCA) is a regulatory framework that lays out guidelines for cryptocurrencies and the whole sector, and it is about to be implemented in Europe. To bring cryptocurrency companies up to par with conventional financial institutions, it also imposes certain legal restrictions on them and enforces disclosures.
The Data Act, which specifies rules for handling sensitive personal and corporate data and supports MiCA law, has also been introduced by the European Parliament.
Similarly, Hong Kong is likewise close to constructing a complete regulatory net for the cryptocurrency business and is now reviewing applications from VASP aspirants.
More than 80 businesses have expressed interest in opening locations in the city-state, according to recent statements from Hong Kong officials, and some 20 businesses have already submitted license applications.