Cryptocurrency exchange Kraken has opened a derivatives trading platform in Bermuda, having received a license from the Bermuda Monetary Authority (BMA).
Bermuda is becoming an attractive locale for regulating cryptocurrency activities. Kraken follows Coinbase International and HashKey Global to the island.
Lots of trading options
The BMA indicates that Payward Digital Solutions (Kraken’s legal name) received a Class F Digital Business License on July 30, enabling it to provide wallet services, operate as a digital asset derivative exchange provider and operate as a digital asset lending or digital asset repurchase transactions service provider, among other things.
Alexia Theodorou of Kraken Derivatives confirmed the licensing and told Cointelegraph:
“The BMA has demonstrated that it is committed to fostering innovation. Its licensing process is rigorous yet fair, and both protects consumers and ensures businesses operate with transparency and integrity: something Kraken is fully aligned with.”
Kraken’s initial offerings on the new platform are perpetual and fixed maturity futures with over 200 contracts available. Collateral options include fiat currency and more than 30 cryptocurrencies.
In its announcement, Kraken said its expansion is “well timed.” Head of trading Shannon Kurtas said “derivatives now account for the majority of total crypto trading volumes. […] We anticipate continued growth in derivative volumes and open interest.”
Customers in eligible jurisdictions can use the platform, the exchange said, without specifying which jurisdictions those are.
Some of Kraken’s futures trading options. Source: Kraken
Bermuda is welcoming, while some other jurisdictions are difficult
Bermuda has been developing its crypto sector under pro-crypto Premier E. David Burt, who took office in 2017. The Bermuda Digital Asset Business Act was passed in 2018.
Binance invested in a “global compliance base” in Bermuda, which created around 40 new jobs in 2018. The Bermuda Stock Exchange became home to the first-ever Bitcoin (BTC) exchange-traded fund in 2020.
Coinbase International launched retail perpetual futures trading under BMA regulation in September 2023. Hong Kong-based HashKey Group opened HashKey Global there in April, praising the regulatory environment Bermuda offered.
Source: David Burt
Burt appeared at the Wyoming Blockchain Symposium in August, where he said that “Bermuda prides itself on being a compliant jurisdiction to international standards.” Kraken was a co-host of that event. Burt said in the Kraken announcement:
“We are pleased to welcome Kraken to Bermuda and in joining our growing market of BMA licensed digital asset businesses.”
Kraken paid $30 million in a settlement with the United States Securities and Exchange Commission (SEC) and agreed to close down staking operations in that country in February 2023. In November of that year, the SEC charged Kraken with “operating [a] crypto trading platform as an unregistered securities exchange, broker, dealer, and clearing agency.”
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