San Francisco-based cryptocurrency exchange Kraken is mulling registration with U.S. regulators as a licensed broker-dealer firm or an alternative trading system (ATS), Bloomberg reports.
The move comes just as the U.S. Securities and Exchange Commission is seeking legitimate platforms serving as trading venues for digital assets. The Wall Street’s top watchdog made it clear that any entity wants to become an ATS needs to register with the SEC as a broker-dealer and become a member of a self-regulating organization, such as the FINRA.
If successful, the Kraken ATS will provide a secondary market liquidity for ICO tokens that are offered and sold as securities. An alternative trading system is a trading venue that is not regulated as an exchange but operates for matching the buy and sell orders of its subscribers.
“We would probably get registered as a broker dealer and then an ATS. I don’t think it necessarily helps the business. I think we’re doing everything right anyway,’’ said Jesse Powell, the CEO and founder of Kraken.
Powell, whose exchange ranks in the top 15 in trading volume, refused last month to hand over business operation details to New York Attorney General’s office after receiving a recent order. The CEO of Kraken said he found the exploration insulting.
“The AG doesn’t have any authority over us. Two things I really hate are bullies and hypocrites, and this guy is both,’’ he added in an interview.
Kraken is not alone in making moves toward becoming an ATS. Recently, Coinbase and Bittrex were reportedly in talks with the SEC to launch the world’s first compliant ATS for blockchain assets.