- Initially, Kraken acquired $5 million in a Series A round of Funding.
- Kraken had to release at least 1100 employees from its branches in less than a month.
- Kraken received a $30 million fine and had to shut down its crypto-staking services within the US.
The 2022 Crypto winter has ushered in a relatively cold age during the beginning of 2023. Many crypto traders have been adversely affected; likewise, digital asset adoption took a heavy blow. Fortunately, the resilience of the global blockchain adoption has withstood the harsh “blizzard”. It is seeing some improvement as Bitcoin recently retained the US$22,000 mark. Unfortunately, those that did drive the crisis still need to be put in the clear. Kraken crypto exchange, one of the largest crypto exchanges, is facing possible bankruptcy.
Kraken has received numerous issues over the past few months. Many wonder if this might be the beginning of the end for this titan.
Kraken crypto exchange initial Goal
The crypto ecosystem has seen its fair share of crashes and epic disasters that have almost collapsed its environment. Jesse Powell launched the Kraken crypto exchange during the golden ages of Bitcoin and more before the concept of a crypto winter—companies such as MT. Gox has taken the crypto ecosystem by storm, and earning millions inspired Jesse.
At the time, MT Gox was one of the first and dominant crypto exchange platforms. The sheer potential MT Gox had tapped into inspired Jesse to start his very own crypto exchange platform. He planned to spread awareness and the financial freedom of bitcoin and one day replace its initial inspiration MT Gox.
Due to its ambition of one day replacing Mt Gox, they had no close relations. Within its firm’s involvement in promoting blockchain adoption, Kaken acquired $5 million in a Series A round of Funding. An immense feat taking into account that during those times, there was an essential nom that the crypto market was “monopolized” by a select few organizations ad crypto currency. This was mainly because blockchain adoption was still relatively new.
Kraken crypto exchange touted itself as the new standard for secure, feature-rich Bitcoin trading. Although its fae truly shined when MT. Gox experienced the first-ever crypto hack known in History. Its shortcomings significantly affected the entire crypto ecosystem and even the concept of digital asset adoption. Fortunately, Kraken was an upcoming crypto exchange at the time. It stepped up to take control of the situation and audit security. What appeared as a mere dream soon turned into a reality. It soon became the largest crypto exchange at the time, acquiring numerous investors who sought the concept of digital assets adoption.
Despite its initial goals, Kraken tried to assist MT Gox with its bankruptcy issue by assisting its blockchain security o investigating its funding. Krakena corporate owners Payward Inc. formed a collaboration with MT Gox, and the aid was utterly free. This strategically placed Kraken in a positive remark to the entire crypto ecosystem and other licences. Unfortunately, their allies would later prove fruitful for MT Gox as it ended up comoleye;y shutting down.
Despite this, the Kraken crypto exchange achieved its goal to become the largest crypto exchange of its time, and despite being outranked several years later, it still holds its own, or so we thought.
The Kraken crypto exchange may be losing its edge.
From being one of the largest crypto exchanges in 2012 to struggling to stay afloat, the Kraken crypto exchange has lost its edge. The massive 2022 crypto winter did tremendous damage to the entire crypto ecosystem. Crypto user was generally withdrawing their digital assets from various crypto exchange platforms. This caused a massive ripple effect, and some crypto exchanges could not handle it.
Since Kraken crypt exchange is one of the first to establish a functioning ecosystem fully, many thought it would have minimal damage. This fact was far from the truth. Krake crypto change, like any other, significantly felt the damage caused, if not worse. Kraken had to release at least 1100 employees from its branches in less than a month. Jesse Powell announced on December 1st, a month after the FTX created a void within the crypto ecosystem.
According to the documentation, Kraken made this decision from the slow growth caused by the “macroeconomic and geopolitical factors” that had muted customer demand. Within the same month, the largest crypto exchange announced that due to the 2022 crypto winter, it would shut down its operations in Japan. This came after citing a global crypto market acquisition.
It is important to note that Kraken initially had a strong market within Japan’s customs. The crypto company opened its Japanese branch in 2014 under its subsidiary, Payword Asia. In 2022, this company registered as a crypt asset exchange service providing a financial service agency. Unfortunately, after the initial announcement of the Kraken crypto exchange cutting off work within less than three weeks, they announced their exit from the Japanese Maktert for a second time.
Its recent debacle has marked one of the Largest crypto exchange platforms that may likely not proceed. The FTX crash painted a dark light n blockchain and digital asset adoption. Due to its massive side effects, governments all over are taking a streaming approach to any crypto exchanges.
The US SEC has taken the initiative to scrutinize each intricate detail of exchanges t ensure that it contains all the legal and reasonable policies that hold them liable for any misconduct. Despite being one of the largest cryptos exchanges, it is still privately ownded. This means it must adhere to all the guidelines stipulated by a nation’s law to be operational in its continent.
Also, Read Binance sets out to save the crypto industry.
This also suggests that the crypto exchange may conduct various illegalities without the germ nets intervening. According to Jessie Powell, he would consider breaking the law in a wide range of situations if the company’s advantages outweigh its potential penalties. Indeed soon After, the US SEC found a substantial reason to find and convict the largest crypto exchange.
The US SEC release stated, “The complaint alleges that Kraken touts that its staking investment program offers an easy-to-use platform and benefits that derive from Kraken’s efforts on behalf of investors, including Kraken’s strategies to obtain regular investment returns and payouts.”
Kraken was charged a $30 million fine and had to shut down its crypto-staking services within US soil completely.
Kraken has ben an oustsanding crypto exhcnage. Its emphasis on functionality and security has drawn in potential customers from all over the globe. Unfortunately, its recent debacle in ith 2022 crypto winter has seen that its operations have steadily declined.
Its recent announcements are even directly affecting Bitcoin ripe. Since its announcement and upon writing this article, Bitcoin has failed to reach the $22000 mark. Many attribute this value to the recent Kraken News. Crypto traders are now sceptical about digital asset adoption, and this fear is spreading globally. Although blockchain adoption appears to have a steady incline in other sectors, the crypto industry may be drawing its last breath. I Kraken were to fall. Its void will undoubtedly lead to the downfall of the crypto industry.
Blockchain adoption in Africa is at large, but with this unstable nature of one of the largest crypto exchanges, it will be only a mate of time before our crypto ecosystem is dealt the final blow.