US-based cryptocurrency exchange
Kraken (legally named Payward, Inc.) is a United States–based cryptocurrency exchange, founded in 2011. It was one of the first bitcoin exchanges to be listed on Bloomberg Terminal and was valued at US$3 billion in January 2024. The company has been the subject of several regulatory investigations since 2018, and has agreed to cumulative fines of over $30 million. It was the first cryptocurrency company to obtain a bank charter.
History.
Kraken was co-founded in 2011 by Jesse Powell, an alumnus of California State University, Sacramento with Thanh Luu and Michael Gronager. Powell was a consultant for Mt. Gox in resolving a security issue, and began working on Kraken as a replacement anticipating its death; Gox would indeed collapse in 2014, failing security audits. In September 2013, Kraken was launched, offering Bitcoin, Litecoin, and euro trades initially before going on to add additional currencies and margin trading.
In March 2014, Kraken received a $5 million Series A investment from Hummingbird Ventures and Bitcoin Opportunity Fund. A month later, Kraken became one of the first bitcoin exchanges to be listed on Bloomberg Terminal. The same year, Kraken was chosen to assist with the investigation of lost bitcoins of Mt. Gox; the bankruptcy trustees relied upon Kraken due to its proven operating history without being breached by hackers. In June 2015, Kraken opened the first dark pool for bitcoins.
In January 2016, Kraken purchased Coinsetter and Cavirtex, an exchange based out of New York City. With the purchase, clients automatically had accounts transferred over to Kraken. A month later, Kraken announced the completion of its Series B round of investment led by the SBI Group and acquired Dutch exchange CleverCoin, and Glidera, a cryptocurrency wallet service. In March 2017, Kraken acquired Cryptowatch, a charting and trading platform. By December 2017, Kraken claimed to be registering up to 50,000 new users a day.
In April 2018, Kraken announced closure of its services in Japan due to the rising costs of doing business. The company would later return to the Japanese market in 2020. In February 2019, Kraken acquired Crypto Facilities, a British derivatives trading firm. In June 2019, Kraken received $13.5 million from 2,263 individual investors via a special-purpose vehicle. 
In September 2020, Kraken was granted a special purpose depository institution (SPDI) charter in Wyoming, becoming the first cryptocurrency exchange to hold such a charter in the United States. In early 2021, Kraken sought additional funding from investors at a valuation of over $20 billion, with Tribe Capital becoming the company's second largest institutional investor behind Hummingbird Ventures and Arjun Sethi being appointed to the board of directors.
In January 2021, Kraken released a mobile app for international users, which became available in the US in June 2021. In September 2022, Dave Ripley – then chief operating officer – replaced Powell who became chairman of Kraken's board of directors. In November 2022, the company launched a beta version of its non-fungible token (NFT) marketplace. 
In February 2023, Kraken shut down its operations in Japan, for the second time, and in the United Arab Emirates, less than a year after securing a license in the region.
In June 2023, Kraken's NFT marketplace officially launched out of beta testing, with the option for users to pay for listings via fiat or cryptocurrency. In September 2023, Bloomberg reported that Kraken planned to trade outside cryptocurrency for the first time, by offering trading in US-listed stocks and exchange-traded funds. 
Kraken gained a foothold in Europe during 2023 by adding virtual asset service provider (VASP) licenses in Ireland, Italy, and Spain; in October of 2023, Kraken announced plans to continue its European push by acquiring a Netherlands-based crypto-exchange called Coin Meester B.V. (BCM).
In March 2024, Kraken launched a new unit called Kraken Institutional aimed at providing service to institutional investors, hedge funds, and ETF issuers.
In April 2024, Kraken released "Kraken Wallet", the company's own crypto wallet that supports eight blockchains.
Controversies.
Government regulator investigations.
In April 2018, Kraken refused compliance with an investigation by the New York Attorney General's Office regarding the measures taken by cryptocurrency exchanges to protect their customers from market manipulation and money laundering, finding the associated expenditure to be bad for business. The report went on to warn that the Kraken might be breaking the law, suggested that customers stay away from it, and referred the platform to New York State Department of Financial Services for potential violation of local virtual currency regulations.
In March 2019, the exchange came to be investigated by the Office of Foreign Assets Control for potential violation of sanction-regimes by allowing trade with customers based in Iran; a settlement was reached in November 2022 with Kraken paying a fine of $362,000 in addition to agreeing to "invest an additional $100,000 in certain sanctions compliance controls." In late September 2021, Kraken was ordered to pay a fine of $1.25 million to the Commodity Futures Trading Commission for offering unregistered margin trading. 
In February 2023, the Securities and Exchange Commission (SEC) categorized Kraken's staking service as an illegal sale of securities. The company agreed to a $30 million settlement with the SEC in response to allegations that its crypto-asset staking products broke the regulator's rules; Kraken also agreed to cease selling its staking service in the U.S. 
In November 2023, the SEC sued Kraken in the case, "SEC v Payward Inc et al, U.S. District Court, Northern District of California, No. 23-06003." The SEC alleges that Kraken has been operating as a securities exchange without registering as such. Kraken was also accused of mixing customer assets with its own funds. Kraken replied that they do not list securities and there is currently no law to support the registration of crypto exchanges.
Identifying Glassdoor reviewers.
In May 2019, Kraken filed a motion in California's Marin County Superior Court attempting to identify ten anonymous reviewers on Glassdoor. Kraken sued them for allegedly breaching their severance contract. The Electronic Frontier Foundation, saying it represented the anonymous reviewers, claimed in 2020 that identifying the reviewers would harm their First Amendment free-speech rights and have a chilling effect on the expression of others. In 2022, the court ordered Glassdoor to disclose the real identity of some reviewers.
Work culture and layoffs.
In 2019, Powell suggested that parenting was a distraction to being productive and critiqued the economic viability of parental leaves; he went on to question whether choosing to not abide by relevant governmental regulations was a risk worth taking. In June 2022, Powell urged employees in a work meeting to reject the usage of preferred gender pronouns; he then opened a Slack channel to debate whether people should be allowed to choose their gender but not their race or ethnicity. The next day, Kraken released a "culture document" which outlined the libertarian values that it asserted were to be obeyed at work. Among other things, employees were prohibited from labelling others' comments as "toxic, hateful, racist", etc., and particular emphasis was assigned on how "offensiveness" was not forbidden. Powell and his fellow executives encouraged employees who disagreed with the policy to quit, and offered four months' severance for those who opted to do so.
In November 2022, Kraken laid off about 1,100 employees – approximately 30 percent of its workforce. According to "Politico," Powell has advocated for "libertarian philosophical values" at Kraken.
In October 2024, Kraken laid off around 400 employees, accounting for 15% of its workforce as part of a corporate restructuring which added Arjun Sethi as co-CEO.
References.
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