Kraken Expands to Netherlands, Cash Tops Crypto in Money Laundering & Bakkt's Financial Woes
Summary:
Kraken has gained regulatory approval from the Dutch Central Bank to offer cryptocurrency services in the Netherlands. Meanwhile, a U.S. Treasury Department report suggests cash, not cryptocurrencies, remains the favored mode for money laundering. In related news, cryptocurrency firm Bakkt has warned of possible insolvency within a year due to cash flow issues.
Kraken, a well-established cryptocurrency exchange platform, has received the green light from regulatory authorities to launch operations in the Netherlands. On the other hand, a recent U.S. reported highlighted that, in comparison to physical cash, cryptocurrency usage in money laundering activities remains significantly low. Additionally, Bakkt, a cryptocurrency company, has issued a stark warning indicating its dwindling cash reserves that may render it insolvent within a year.
The Dutch Central Bank has officially granted Kraken with its fourth European Virtual Asset Provider (VASP) license. This license will enable Kraken to provide a host of services, including exchange and transfer, as well as custody and wallet services. With the Netherlands becoming increasingly crypto-friendly, Kraken is poised to tap into the 20% of Dutch citizens who own crypto.
At present, Kraken also operates in Spain, Ireland, and Italy, and has a subsidiary in Belgium. In late 2021, it further expanded its footprint in the Netherlands through the acquisition of Coin Meester B.V., a local cryptocurrency exchange.
Conversely, cash continues to be the money laundering tool of choice for criminals, as per a risk assessment report by the U.S. Treasury Department. The wide acceptance, anonymity, and stability of cash make it the most preferred medium for illicit monetary transfers.
Financial tech firm Bakkt, which was designed to expose institutional investors to Bitcoin, launched in 2019 with backing from the Intercontinental Exchange (ICE), the NYSE owner. However, in a recent filing with the U.S. Securities and Exchange Commission, Bakkt revealed that dwindling profits and low cash flows may jeopardize the firm's ability to sustain its operations. The company is considering issuing registered securities in public markets as a potential strategy to raise more capital. Following the announcement, Bakkt's share value experienced a 7.6% drop in after-hours trading on February 7, reaching $1.34. So far, Bakkt's shares have fallen by 37% in 2024.
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Published At
2/8/2024 10:37:05 PM
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