Virtual Currency Exchange Kraken Reaches into Europe (Oct. 17, 2013)
U.S.-based digital currency exchange Kraken is set to be released into Europe. San Francisco’s Payward—the company behind Kraken, which exited beta last month—has inked a deal with Fidor Bank, a German financial services provider that combines traditional banking with Internet-based payments. Under terms of the deal, Kraken will become Fidor’s “exclusive digital currency trading platform” throughout the European Union, except in Germany, where Fidor already has a local partnership with another exchange.
The deal gives Kraken’s European customers access to Fidor’s banking services and earns the company a fully licensed and regulated bank partner in the EU. At home in the U.S., Payward’s operations are limited because it does not have a money transmitter’s license. Only Kraken users in South Carolina, New Mexico and Montana can exchange virtual currency for dollars, while those in other states only can trade virtual currencies. Kraken trades several virtual currencies, including the well-known Bitcoin.
Regulation of virtual currencies has been a hot topic over the past several months. In August, a U.S. judge ruled that Bitcoin is a form of money, while guidance issued in March by the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) said virtual currency administrators and exchanges are required to meet money transmitter regulations. In Europe, meanwhile, a group of Bitcoin companies in the U.K. have sought official recognition from several government financial authorities, and Germany has declared Bitcoin a recognized “unit of account,” which, among other ramifications, means citizens are required to pay capital gains on Bitcoin income.