Kraken Exchange: the founding story

Kraken Exchange is a San Francisco-based cryptocurrency exchange founded in 2011 by Jesse Powell. Powell was inspired to create Kraken after witnessing the security breach at Mt. Gox, the largest Bitcoin exchange at the time. He recognized the potential for a competitor, especially if Mt. Gox ceased operation, leaving a large market behind. Powell saw the opportunity and began working on the basics of a new Bitcoin exchange, which eventually became Kraken.

Early Days of Kraken

Kraken officially launched its platform in September 2013, after two years of internal testing. At the onset, Kraken offered Bitcoin, Litecoin, and Euro trades. The exchange began with a handful of employees and limited resources but quickly gained traction due to its focus on security, transparency, and advanced features. Within a few years, Kraken became one of the largest exchanges globally and established consistent revenue.

Kraken’s Expansion and Acquisitions

Kraken continued to expand its offerings by acquiring other companies to provide better services to users. In 2016, the company acquired Coinsetter, a New York-based trading platform. The acquisition allowed Kraken to immediately trade in 37 states and all Canadian residents. A short time later, Kraken acquired the Dutch exchange CleverCoin and Glidera, a crypto wallet platform.

Product Integration and Growth

Kraken’s product integration strategy focused on its Cryptowatch acquisition, a real-time charting platform for crypto. The company integrated Cryptowatch into its platform, and by the end of 2017, Kraken announced it was adding 50,000 new users a day to its platform. In 2020, Kraken received a Special Purpose Depository Institution charter (SPDI) in Wyoming, becoming the first cryptocurrency exchange to do so. The SPDI charter allows banks to hold digital currencies alongside standard fiat currencies, making Kraken the first regulated American bank to provide comprehensive deposit-taking custody and fiduciary services for digital assets.

Latest update on Kraken on regulatory issues in the US…

Kraken agreed to pay $30 million settlement to SEC

Kraken has agreed to pay a $30 million settlement to the SEC over charges of offering unregistered securities through its staking program. The company has agreed to end its staking-as-a-service platform for US customers immediately. The SEC characterized the program as high-risk for investors, as staking-as-a-service providers offer very little protection. In response, Kraken will unstake all assets held by US clients, with the exception of staked ether. The SEC’s action against Kraken sends a clear message that staking services must comply with securities laws.

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