Although new Kraken CEO Dave Ripley admits he has “huge shoes to fill,” he set out an ambitious vision for how the business aims to negotiate worldwide rules, overcome hurdles, and attract individual investors.
Kraken has developed into a global digital currency exchange responsible for $16.25 billion in volume only in August, according to statistics from The Block Research, in little more than a decade since its July 2011 launch. Ripley stated that now that Kraken co-founder and CEO Jesse Powell is stepping down, he has a legacy to uphold.
“The most essential role that Kraken has served since its inception has been that of a bridge,” Ripley remarked in an extensive interview with The Block. “At first, it was merely a bridge to crypto in general.” To purchase and utilize bitcoin. But, in the future, I believe we will want to expand that bridge to many other areas of crypto.”
Ripley stated that Kraken will immediately aim to increase its workforce and focus on delivering new goods and services in the midst of what he described as a general market downturn worse than prior bear markets. Among those goods and services will be an upcoming NFT marketplace, which will allow users to custody NFTs and buy and sell them with any digital assets in their accounts.
One of the most difficult issues for Kraken when it launches new goods and services is navigating the regulatory frameworks in each of the locations in which it operates. According to Ripley, this duty is “a huge dynamic within the sector, particularly for a firm like Kraken.”
Ripley noted that Kraken employs an army of professionals since it is a centralized business that works with fiat currency and has a foot in both the financial services and crypto industries. It has a legal team of 50 people, a core compliance team of 300 people, and a broad operational compliance team of “a few hundred” people.
Ripley thinks that governments are developing relevant regulatory plans in places such as Europe’s markets in crypto-assets (MiCA) regulation, the framework for which was recently agreed by EU authorities on Sept. 21.
According to Ripley, it is vital for regulation that basic elements of cryptography, such as sovereign key custody and the openness of Layer 1 networks, are protected. “We think those are extremely crucial,” he added, admitting that rules for firms like Kraken are “a given” and expressing “hope in finding out the proper way for companies like us.”
Kraken’s dedication to open access may have prompted the US Treasury Department to investigate the firm in July of this year. According to the New York Times, users in Iran, Cuba, and Syria were permitted to use the exchange to acquire and sell digital currency in contravention of US restrictions.
Moving forward, Kraken will expand on its consumer-facing products, which have accounted for the majority of the company’s growth since their introduction in 2020, according to Ripley. This will entail making “simpler and digestible” versions of some of the items used by professional traders available to consumer traders. Kraken will also release a redesigned user interface, which is already available on the mobile app.
Despite its efforts to simplify its consumer-facing interface, Kraken will not abandon its institutional clients. “We’re going to deliver some additional goods and services for those people as well,” Ripley said, adding that the firm provides access to a variety of APIs and hosts an over-the-counter trading desk for family offices and high net-worth individuals.
According to The Block Research, Kraken’s markets have witnessed a somewhat consistent fall in volume after reaching an all-time high of $100 billion in May 2021. Despite the market cycles, Ripley stated that this isn’t Kraken’s “first rodeo,” but that it doesn’t make things any easier. According to Ripley, scaling up or down while retaining efficiency remains a big problem for Kraken.
“There is always unpredictability in these cycles,” Ripley added. “So it would be a lot easier if we knew exactly when the market would become really active again, and prices would change, and all of these sorts of things.” But because we don’t, we don’t know the timing. So it’s something more that makes it harder to plan for.”
Another difficulty, according to Ripley, is the crypto industry’s general success, which he defines as “we’re beginning to see more traditional financial businesses coming in, a ton of new various startups and innovators, so it just adds more competition to the field.” With all of the new competition, “making sure that Kraken carves out its space and its role in this evolving space is something that’s a big challenge for us, I think for all companies in general, and this is why we focus a lot of attention there and really thinking hard about our strategy and making sure we’re headed toward the right north stars,” he said.
There are big shoes to fill
Ripley, who took over as CEO following Powell, noted that his predecessor left “large shoes to fill.” Powell spent 11 years building Kraken into a worldwide exchange, handling over $160 billion in trade volume between the first and second quarters of 2021 under bull market circumstances.
Despite his departure, Powell’s unwavering belief that crypto is for everyone will remain a guiding direction for the Kraken culture. It is a civilization that, according to Ripley, will “stay perfectly identical.”
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