(Bloomberg) -- Kraken plans to offer trading in US-listed stocks and exchange-traded funds, marking the 12-year-old company’s first foray outside its cryptocurrency roots.
Kraken will initially offer trading in the US and UK through a service built by a new division called Kraken Securities, according to a person with knowledge of the matter who asked not to be named discussing private information. It already holds the required regulatory permits in the UK and has applied with the Financial Industry Regulatory Authority for a broker-dealer license in the US, the person said.
The company is targeting a 2024 launch for the new service, according to the person.
Founded in 2011, Kraken is one of the oldest names in crypto, and it has survived several bear markets — including the one last year that saw companies from FTX to Celsius Network implode. Its push into equities comes almost two years after Bitcoin peaked at close to $69,000, giving way to a “crypto winter” that has dimmed the industry’s allure and sapped volumes.
Chief Executive Officer Dave Ripley’s move into equities is far from a surefire bet. It will bring Kraken into a crowded market of zero-commission players like Robinhood Markets Inc. and Public.com. It also comes after the frenzy of retail trading unleashed by the Covid-19 pandemic has largely fizzled out. Public.com expanded into the UK in July, while Robinhood plans to launch brokerage services to individuals in the country this year.
Read more: Robinhood Rival Public.com Makes Its International Debut in UK
After stock trading over Kraken goes live, eligible customers will be prompted to activate the service. Those who do so will see their portfolio of crypto, stocks and ETFs presented as a single balance, the person familiar said.
FTX.US announced in May 2022 that it would start offering stock trading. The exchange was wiped out six months later as founder Sam Bankman-Fried’s wider FTX Group imploded.
Kraken is also building out its prime brokerage services, and launching a qualified custodian for institutional clients in coming weeks, according to a person familiar with that effort. The custody service will be run sepatately from the exchange and Kraken has applied for approval with the state of Wyoming, the person said.
Read more: Wyoming’s Crypto Aspirations Are Colliding With Economic Reality
A Kraken spokesperson declined to comment. The UK’s Financial Conduct Authority didn’t immediately respond to a request for comment. A Finra spokesperson said the US agency doesn’t comment on membership applications.
Kraken has taken market share this year even as trading volumes dropped. The gains have come in large part at the expense of market leader Binance, which was founded six years after Kraken and has been hit by a crackdown from regulators around the world this year. At 3.5%, Kraken’s share of global spot trading is the highest since 2018, according to CCData.
--With assistance from Emily Nicolle.