Professional trading platform Kraken has announced it will open up operations in Japan sometime next month.
After Mt. Gox was shattered by a US$470 million heist, a vacuum was created in the Japanese Bitcoin market. One of Mt. Gox’s insiders, Jesse Powell, tried to help and restore the flailing giant after a hacking attack back in 2011. That is when he decided to found a competitor – Kraken.
In result of Mt. Gox’s collapse, the newly founded Kraken soon found itself as one of the top Bitcoin exchanges with its base surging 50 percent in two months. “The company accounts for about half of the virtual currency’s daily euro trading,” says Powell.
Kraken was also part of Cointelegraph’s online exchange reviews, which you can read here.
Long way to Japan
Jesse Powell has over a decade long experience in the industry. His company Lewt, an equivalent of Amazon.com for virtual potions, runes etc, prospered even after the so-called real money trading and sale of in-games items were banned by many companies responsible for running big online multiplayer games.
“The whole game currency space was very interesting to me, which is how I was able to notice bitcoin,” Powell said. “It has all the benefits of these gaming currencies without that centralized point of weakness. I think it’s really the future.”
The United States’ law made it difficult for Kraken to launch and then to get custodial bank accounts to hold customer funds. Because of the guidance on virtual currencies issued by the Financial Crimes Enforcement Network, the launch of Kraken’s services was delayed for half a year. According to US law, the company had to limit their US services to only five states, so Powell decided to look for another market to introduce Kraken.
That is why he got accustomed with a Japanese law making his company one of the founding members of the Japan Authority of Digital Asset along with CoinPass and BitFlyer. Kraken’s founder observed that a lot of difficulties with opening new markets for Bitcoin businesses are a result of regulatory hurdles and uncertainty. After the struggle with the American law, Powell admitted:
“I was really surprised how open-minded Japanese politicians are. Compared to Japan, the United States is in the Dark Ages.”
The partnership with Germany’s Fidor Bank AG (F5R) was one of the company’s breakthroughs. Powell comments on this fact:
“Euro trading of virtual currencies, including bitcoin, litecoin and dogecoin, accounts for about 95 percent of the company’s volume. The exchange also allows deposits and withdrawals in South Korean won.”
Powell also admits that the launch into a new region depends on finding a bank partner in this region as it requires not only a lot of hard work, but also involves a great sum of financial resources. Kraken acquired its own bank partner in Japan, whose name remains unknown, and is now ready to open up the service to Japanese traders.
The competition on the Japanese market intensified after the bankruptcy of Mt. Gox which left a vacuum in the virtual currency business. According to a NEWSBTC journalist, Eric Calouro, the interest in Bitcoin in Japan will only rise and because of limited trading options, Kraken is able to attract scores in of new traders in the country while raising fees at that. Moreover, the BTC price index notes that Bitcoin fetched about US$494 in Tokyo today, down from a record US$1,151 in December, which could also attract new users and investors due to the lower price point.
Multiple companies try to take Mt. Gox’s place. BitFlyer begun to offer their services in April, while a Chinese startup BitOcean joined with New York-based Atlas ATS Inc decided to bid for the assets of the defunct Mt. Gox and start a Bitcoin platform this month.
The specific date of Kraken’s launch has not been released yet, but it is believed that its opening will “pave the way for professional cryptocurrency-trading solutions” sometime next month.
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