Last updated on March 17th, 2015 at 10:57 pm
There’s a new cryptocurrency exchange expecting for you and its name is Kraken. The platform, which deals with several types of currency, is finally open and ready to trade after a long beta test phase. For now, it’s only possible to trade between Euros, Bitcoins and Litecoins. However, in a month, there will be more options like US dollars, British pounds or Namecoins.
Kraken – designed to bring virtual coin traders some of the same features enjoyed by forex traders like stop orders and margin trading – was developed by Jesse Powell, the CEO of the San Francisco-based company Payward. The platform guarantees high security levels, mainly due to its four levels of authentication. While the first three are quite simple, the fourth is intended for businesses that will be exchanging funds through Kraken, so it’s more complex.
“I’d say the biggest thing we learned from the beta is that people are really excited about the more advanced trading features, rather than caring about compliance. We’ve also learned that investors put businesses into two pools: launched and unlaunched, and that probably matters more than whether you’re actually operating legally from a valuation perspective”, explained Jesse Powell.
Meeting legal requirements is one of the company’s main goals, especially because the platform is based in the United States: “our aim is to be the first fully compliant Bitcoin exchange in the United States. There isn’t one yet. Hopefully we’ll be the first”.
“We’ve seen how much the federal government cares about consumer protection (see NSA) so it’ll be interesting to see what develops between the states who are driving Bitcoin businesses outside of the US and the federal government who would very much like to keep those businesses here, within their subpoena power”, Powell added.
So far, the states have shown that being offshore offers protection. Lesson: if you’re based in the US, you’ll be hassled, if you locate offshore you’re free to service US customers without consequence. Not a very positive signal to US businesses and certainly not what federal law enforcement would like to see.
We’re not just trying to slide under the radar and get away with it. They very much know what we’re doing. But it’s always possible that some bank will say, okay, we’ve decided that bitcoin businesses are too much risk and we can’t work with you anymore for whatever reason.
Although Kraken maintains different bank accounts in several jurisdictions – like Europe, Asia and United States -, Powell assures that the platform is working to be legally compliant and cooperate with the banks.