The crypto exchange Kraken implements stricter supervision


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The recent moves by major crypto exchanges like Kraken are signaling a shift towards increased surveillance, especially in regions like the United Kingdom. 

Kraken’s recent decision to request information on ownership of self-custody wallets in the United Kingdom has sparked debates on privacy, regulation, and the future of cryptocurrency transactions.

The moves of the Kraken crypto exchange 

In an email sent to selected clients, Kraken has outlined its new requirements, stating the need to keep updated information on clients and their account activities involving self-custody wallets.

Self-custody wallets, unlike those hosted by exchanges, are wallets in which users have exclusive control over their private keys, offering a higher level of security and autonomy. 

Kraken’s request for information on these wallets represents a departure from the traditional hands-off approach often associated with cryptocurrency exchanges.

The email, confirmed as legitimate, specifies that customers must confirm ownership of the self-custody wallets used for transactions with Kraken exchange wallets.

In addition, if self-custody wallets are not directly controlled by the customer, Kraken requires the names and residential addresses of those who control them. 

The failure to communicate this information within a certain deadline could result in the blocking of the customer’s account.

This move has raised concerns among cryptocurrency enthusiasts and experts. James Van Straten, Chief Analyst at Cryptoslate, publicly shared the email, highlighting the implications of Kraken’s decision. 

Van Straten emphasized that this marks the beginning of what could be perceived as a state of surveillance in the United Kingdom, where exchanges like Kraken are required to collect and retain detailed information about their customers’ transactions.

The regulatory developments of the European Union

Furthermore, Kraken’s timing of the decision coincides with broader regulatory developments in the European Union. Cris Carrascosa, a lawyer specializing in cryptocurrencies, highlighted the imminent application of Regulation (EU) 2023/1113 on the information accompanying fund transfers and certain cryptographic assets. 

This regulation, commonly known as the Funds Transfer Regulation (TFR), imposes similar data requirements for transactions involving service providers located in the EU. Although this legislation will come into effect at the end of the year, Kraken’s proactive measures in the UK indicate a broader trend towards increased surveillance and compliance in the cryptocurrency sector.

The implications of Kraken’s move go beyond concerns for individual privacy. Critics argue that increased regulatory control could undermine the fundamental principles of decentralization and anonymity that are at the core of the appeal of cryptocurrencies. 

Self-custody wallets have long been supported as a means for users to maintain full control over their assets without relying on centralized intermediaries such as exchanges. 

However, the increasing regulatory pressure on exchanges for the collection and communication of data on these portfolios threatens to erode this autonomy.

On the other hand, supporters of regulatory oversight argue that it is necessary to combat illicit activities such as money laundering and terrorism financing.

By asking exchanges to verify the identity of users and monitor their transactions, regulatory authorities aim to create a more transparent and responsible cryptocurrency ecosystem.

Kraken’s compliance with British regulations could be seen as a step towards greater legitimacy and acceptance of cryptocurrencies in traditional finance.


In conclusion, Kraken’s decision to request additional information on self-custody wallet transactions in the United Kingdom marks a significant development in cryptocurrency regulation. 

This move reflects the exchange’s commitment to comply with evolving regulatory standards, particularly those aimed at improving transparency and combating financial crimes such as money laundering and terrorism financing.

Although some users may perceive this requirement as an intrusion into their privacy and autonomy over their cryptocurrency assets, it emphasizes the importance of regulatory compliance in the maturation and integration of the cryptocurrency sector into the traditional financial system. 

Furthermore, since similar regulations are expected to be implemented throughout the European Union in the near future, Kraken’s actions could serve as a precursor to broader regulatory trends affecting cryptocurrency exchanges and users worldwide.

In conclusion, as the cryptocurrency landscape continues to evolve, users and industry operators must find the delicate balance between regulatory compliance, user privacy, and the fundamental principles of decentralization that underpin the appeal of cryptocurrencies. 

Kraken’s proactive approach to regulatory compliance demonstrates its commitment to operating within the bounds of the law and maintaining the trust of its user base.