Kraken acquires TradeStation’s cryptocurrency business

Kraken, the second-largest U.S.-based cryptocurrency exchange, has acquired the cryptocurrency arm of online brokerage TradeStation.

This move was first reported by CoinDesk on Thursday, although the exact closing date of the acquisition has not been disclosed by Kraken.

The acquisition is a strategic part of Kraken’s effort to expand its services across the United States. This is in line with the company’s broader expansion strategy, which includes acquiring licenses in several key European markets such as Spain and Ireland earlier this year.

“We can confirm Kraken has recently purchased TradeStation’s crypto business,” a Kraken representative stated. “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.”

TradeStation Crypto is well-prepared for integration, holding money transmitter licenses in 47 states, Washington D.C., and Puerto Rico, according to the U.S. Financial Crimes Enforcement Center’s (FinCEN) database. Compliance with U.S. law is critical for crypto exchanges operating in the country, requiring money transmitter licenses for each state they operate in and registration of business activities at the federal level.

TradeStation Crypto agreed in February to settle charges with the Securities and Exchange Commission (SEC) for failing to register a crypto lending product that offered investors the opportunity to earn interest on their deposits.

The digital asset-focused subsidiary of Monex Group’s TradeStation paid a $1.5 million penalty to resolve the charges without admitting or denying the findings.

Founded in 1982 and acquired by Japanese finance group Monex in 2011, TradeStation ventured into the cryptocurrency market in 2020 by offering deposit accounts that allowed customers to earn interest. By 2021, the platform boasted 11,122 active users globally engaging with the interest feature. However, the SEC determined that TradeStation’s crypto lending product constituted a security, which did not qualify for a registration exemption. Consequently, the Florida-based platform ceased offering this service on June 30, 2022, following the SEC’s directive.