Kraken Addresses Tether Delisting Rumors, Vows Compliance with EU Crypto Rules
Please note that we are not authorised to provide any investment advice. The content on this page is for information purposes only.
Cryptocurrency exchange Kraken has addressed ongoing rumors about potentially delisting Tether’s stablecoin USDT in Europe ahead of new regulations. Kraken’s Global Head of Asset Growth & Management, Mark Greenberg, emphasized that the exchange has no plans to stop supporting the Tether stablecoin.
Kraken Clarifies Stance on Tether (USDT) Support
The rumors emerged after a Bloomberg report last week stated that Kraken was “actively reviewing” USDT’s status in the European Union (EU) to comply with the upcoming Markets in Crypto-Assets (MiCA) regulation set to take effect in July 2024.
However, Greenberg clarified that European users “value access to USDT,” Kraken aims to maintain stablecoin offerings, including Tether’s token, which will gear the exchange to adhere to all legal requirements, even if they disagree with specific rules.
Let's be clear: @krakenfx continues to list USDT in Europe and we have no plans to delist at this time.
We know our European clients value access to USDT and we continue to look at all options to offer USDT under the upcoming regime.
We will of course follow all legal…
— Mark Greenberg (@marklg) May 18, 2024
The Kraken executive’s statement follows comments from Marcus Hughes, the exchange’s global head of regulatory strategy, who told Bloomberg that Kraken was prepared for “all eventualities,” including potentially delisting USDT based on how the MiCA rules finalize.
Tether, the issuer of USDT, expects major exchanges to prioritize providing euro liquidity for EU customers and maintain USDT as an on-ramp and off-ramp solution.
The situation highlights how crypto exchanges are cautiously and proactively positioning themselves amid increasing regulatory scrutiny around stablecoins, which authorities have warned could be vectors for illicit finance.
Tether has faced regulatory fines and penalties for lack of transparency around its USDT stablecoin.
Major exchanges like Kraken are now stuck between protecting access to popular tokens like USDT while ensuring compliance with anti-money laundering and other rules in the EU’s MiCA package and similar regulations emerging globally.
Could Increased Tether Regulation Cause a Crypto Crash?
Ripple CEO Brad Garlinghouse recently stated that he believes an unforeseen and highly impactful “black swan” crisis event is inevitable for the cryptocurrency industry.
He suggested that the way the U.S. government strictly examines Tether, which recorded a profit of $4.52 billion in Q1 2024, could potentially hurt the crypto industry, given USDT’s massive $83 billion market cap and systemic importance.
Initially, Tether expressed reluctance to comply with the EU’s MiCA framework. But, the intense pressure faced by both U.S. and European authorities has made Tether’s CEO signal that the company may ultimately adhere to MiCA’s provisions when they take effect in 2024.
The MiCA regulations stipulate that issuers of fiat-backed stablecoins like USDT must follow existing electronic money institution (EMI) rules. Many stablecoins currently operating in Europe lack such EMI licensing, effectively rendering them non-compliant.
As Kraken’s users await if the exchange will finally delist USDT, it is worth knowing that competitors like OKX have already delisted USDT for European users since March.
However, this will not be the first time Kraken has been compelled to delist tokens to adhere to regulatory compliance. The exchange ended support for the privacy cryptocurrency Monero (XMR) for Belgian and Irish users in April 2024.
Despite the tense regulatory atmosphere, the exchange continues to expand its service base in Europe, the exchange recently secured virtual asset service provider (VASP) registrations in Spain and the Netherlands, as well as an EMI license in Ireland.
