An interesting move and I'm surprised it hasn't occurred to other exchanges. It's a natural extension.
Since Kraken seems a little casual about its regulation compared to other operations I wonder whether this will bring more heat on them. Does it require more explicit regulation if it's pure fiat?
There are some forex-specific regulations on US-based firms that presumably apply now.
For example, capital requirements:
Under Dodd-Frank rules, enforced by the CFTC, firms offering retail forex trading in the United States must maintain minimum capital of at least $20 million, plus 5 percent of the amount by which liabilities to retail forex customers exceed $10 million.
By comparison, the minimum capital requirement in Cyprus, where many FX brokers have moved, range from 40,000 euros ($42,680) to one million euros ($1.067 million).
I assume Kraken meets those. However, US-based forex brokers
are supposed to register with the CFTC and NFA, yet I can't seem to find Kraken's registration in
the NFA's registry.
Kraken has always occurred to me as rather bold and unruly for a US-based company, operating on the margins regarding money transmission and CFTC margin regulations, not to mention
that middle finger they gave to the state of New York.
Maybe they plan on skirting the law in this area too.
