Kraken Acquires TradeStation Crypto to Expand Regulatory Licensing in US

Cryptocurrency exchange Kraken is buying TradeStation Crypto, the digital assets unit of TradeStation Group.

With this acquisition, Kraken aims to expand its regulatory licensing in the United States, Seeking Alpha reported Thursday (April 18).

“The transaction is part of our efforts to accelerate our U.S. presence and will unlock further growth and new product opportunities for Kraken in the U.S.,” a Kraken spokesperson said in the report.

TradeStation Crypto has money transmitter and other regulatory licenses in many U.S. states, according to the report.

However, the Securities and Exchange Commission (SEC) said the company failed to register a crypto lending product before offering it to investors, and paid $1.5 million in a settlement, according to the report.

Kraken also had a run-in with the SEC. In November, the agency charged the company with commingling customer money with its own while operating as an unregistered securities exchange, broker, dealer and clearing agency, per the report.

The company responded at the time by saying it disagrees with the SEC’s position and intends to defend its position in court.

“The complaint against Kraken alleges no fraud, no market manipulation, no customer losses due to hacking or compromised security, and no breaches of fiduciary duty,” Kraken said in a blog post.

During an April 10 conference in New York, Kraken’s chief compliance officer CJ Rinaldi said the company has learned that it’s best to identify problems and notify regulators directly, thereby avoiding surprises.

Rinaldi was one of three chief compliance officers of cryptocurrency exchanges speaking at Chainalysis’ Links conference. Like the others said of their companies, Rinaldi said Kraken continues to invest in compliance controls and staffing and hopes the rest of the industry can learn from its experience.

In another recent move, Kraken said in February that it was introducing a new brand, Kraken Institutional, that aims to be a one-stop shop for the company’s existing products and services for institutions, asset managers, hedge funds and high net-worth individuals.

Kraken Institutional will act as the sole point of contact for scalable and easy-to-integrate solutions for institutions seeking exposure to the crypto asset class.