Powell started Kraken in the aftermath of the hack of the Mt. Gox exchange, after having helped the now-defunct exchange with its early problems. These shortcomings are what motivated Powell to build a more robust exchange.
Though the company is headquartered in San Francisco, California, Kraken operates worldwide with most of its activity in Europe. In 2013, in an effort to offer Kraken’s European customers regulated crypto trading services, the company partnered with Germany-based Fidor Bank, whose goal was also to bring emerging and innovative markets to its customers.
In 2014, Kraken launched their cryptocurrency trading platform in Japan, but closed this service down in 2018, citing operations costs. In 2015, Kraken announced a partnership with Canadian digital currency risk-management specialist company Vogogo and, as a result, launched its trading platform in Canada.
In 2015, New York State implemented a new regulatory approach to businesses offering services related to cryptocurrencies and digital currencies. These businesses were required to apply for a license, dubbed the BitLicense, for which there is a $5,000 application fee, though some businesses noted that the legal and compliance work necessary for the application created additional costs.
Kraken, along with many other blockchain companies, decided against applying for the license and pulled their services from New York State. In 2018, the New York Attorney General opened an inquiry into cryptocurrency exchanges and sent letters to 13 exchanges, including Kraken. Powell said Kraken would not respond to the inquiry.
In 2019, Kraken became one the first exchange worldwide to offer futures trading after they acquired startup Crypto Facilities, for $100 million. Crypto Facilities is registered with the U.K. Financial Conduct Authority. Within a month of the launch, Kraken saw nearly $1 billion in crypto futures trading across bitcoin, ether, litecoin, XRP and bitcoin cash.