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FCA Hits Kraken With Illegal Service Provision Allegations

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The UK’s financial regulator, the Financial Conduct Authority, or FCA, has recently accused one of the oldest cryptocurrency exchanges in the world, the Kraken Exchange, with illegally providing its service within the UK.

Claims of Illegally Given Services To UK Citizens

According to the FCA’s statement, Kraken, and by extent the domain it uses, is illegally offering products and investment opportunities to residents within the UK.

The FCA’s statement explained that the firm was providing financial services and products within the UK without the regulator’s approval. Thus, the FCA must first authorize Kraken, like it authorizes all individuals and firms that offer, sell, or promote financial services within the UK. As one would imagine, Kraken doesn’t hold the proper authorization to do these services within the country.

The FCA noted that the number of cases where a company is offering a financial service, one that it doesn’t have the proper authorizations and approval for, is becoming more and more frequent within the UK. Thus, the department’s employees are asking its resident users to be attentive to the issues at hand, and not trust companies that haven’t received the proper licensing from the UK.

Summary Denial

In an amusing twist of fate, Kraken has doubled down on the allegations thrown at it. The exchange had sent representatives that summarily deny all accusations. According to the employees of Kraken itself, they do not utilize mail with the address the FCA had listed in their statement, but do concede that they use the domain.

To back their argument, they cite the futures platform CryptoFacilities. CryptoFacilities belongs to Kraken and is itself registered to the FCA. Thus Kraken claims approval by extension. Not to be outdone, Kraken has sent counter-accusations against the FCA, demanding answers as to why the regulator is spreading information regarding Kraken that isn’t the full truth.

Crypto’s Wild West Has Come To Pass

This isn’t the first time the wheels of progress had caught one of the world’s oldest crypto exchanges by surprise. Back in 2015, the exchange was forced to back out of providing services to New York citizens, due to the state mandating a BitLicense to do crypto activities within its borders. Kraken, alongside 21 other crypto companies, was forced to back out of the state.

There are the usual problems when it comes to licensing, with difficulty in obtaining the New York crypto license being especially infamous. It’s gotten to the point where many crypto companies outright gave up on the prospect, seeing it easier to move outside of the state, rather than try to apply just to be denied.

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