Kraken Becomes Third US Cryptocurrency Exchange to Register as VASP in EU Countries

According to reports, the US cryptocurrency exchange Kraken has registered a subsidiary of Payward Europe Solutions as a virtual asset service provider (VASP) with the Central Bank of Ireland. Kraken, through its subsidiary, became the third US encryption platform approved to operate in EU countries. The exchange Gemini and Coinbase were authorized as VASP in July 2022 and December 2022, respectively.

Kraken obtained Irish license to become a virtual asset service provider

As the digital asset industry continues to grow worldwide, regulatory bodies are working hard to ensure that virtual asset service providers (VASPs) are held to strict standards of compliance. One of the most recent developments in this area is the registration of Payward Europe Solutions, a subsidiary of US cryptocurrency exchange Kraken, as a VASP with the Central Bank of Ireland. The move makes Kraken the third US-based digital currency platform to be authorized to operate in EU countries under the VASP framework. In this article, we will explore what this development means for the cryptocurrency industry and what it could mean for Kraken itself.

What is a VASP?

Before diving into the details of Kraken’s registration as a VASP, it’s important to understand what a VASP is and how it’s regulated. In simple terms, a VASP is any business that facilitates the exchange of virtual currencies or provides custody services for users’ assets. This includes cryptocurrency exchanges, wallet providers, and other digital asset platforms. VASPs are regulated by various government agencies around the world, including the Central Bank of Ireland, which oversees financial service providers operating in Ireland.

What Does Kraken’s Registration Mean?

Kraken’s registration as a VASP in Ireland is significant for several reasons. Firstly, it allows the exchange to offer its services to customers in EU countries, expanding its reach beyond the US market. Secondly, it demonstrates Kraken’s commitment to regulatory compliance and its willingness to work with governments to improve the transparency and legitimacy of the cryptocurrency industry. Finally, it puts Kraken on a level playing field with other US-based cryptocurrency exchanges such as Coinbase and Gemini, which were authorized as VASPs in 2022.

What Are the Benefits of VASP Registration?

There are several benefits to registering as a VASP, both for the service provider and for its customers. For the VASP, registration ensures that the business complies with strict regulatory standards, helping to establish trust and legitimacy in the eyes of customers and investors. It also allows the VASP to operate legally in jurisdictions where digital asset services are tightly regulated, such as the EU. For customers, using a VASP that is registered and compliant with local laws and regulations provides an extra layer of security and protection for their assets.

What Are the Risks of VASP Registration?

While there are many benefits to VASP registration, there are also potential risks to be aware of. One of the main risks is the cost and complexity of achieving and maintaining compliance. Regulatory requirements are constantly evolving, and VASPs must stay up-to-date with new laws and regulations in order to avoid fines or other penalties. There is also the risk of reputational damage if a VASP is found to be non-compliant or involved in illegal activities.

Conclusion

Kraken’s registration as a VASP in Ireland is a significant step forward for the exchange and for the cryptocurrency industry as a whole. It demonstrates that regulatory compliance is becoming increasingly important for digital asset businesses, and that leading exchanges are willing to take the necessary steps to ensure that they are operating legally and ethically. While there are risks associated with VASP registration, the benefits outweigh the potential downsides for both service providers and their customers.

#FAQs

**Q. What is the Central Bank of Ireland?**
A. The Central Bank of Ireland is the regulatory authority responsible for overseeing financial service providers operating in Ireland.
**Q. What are the benefits of using a VASP?**
A. Using a VASP provides an extra layer of security and protection for customers’ assets, as VASPs must comply with strict regulatory standards.
**Q. Are there risks associated with VASP registration?**
A. Yes, there are potential risks such as the cost and complexity of achieving and maintaining compliance, as well as the risk of reputational damage if a VASP is found to be non-compliant or involved in illegal activities.