Cryptocurrency exchange Kraken reassured users it has no plans to delist Tether’s USDT stablecoin in Europe, committing to continue meeting all legal requirements.
In an announcement on social media, Kraken’s global head of asset growth and management, Mark Greenberg, addressed recent reports suggesting the exchange was “actively reviewing” and potentially planning to delist USDT from the European market. Greenberg emphasized that European clients value access to USDT and that the firm is exploring all options to offer USDT under the upcoming regulatory regime.
The European Union’s Markets in Crypto Assets regulation (MiCA), set to take effect later this year, will impose new rules on stablecoins, focusing on their promise of a stable value against fiat currencies.
SEC’s Lawsuit Against Kraken
In November 2023, the Securities and Exchange Commission (SEC) initiated a lawsuit against Kraken, alleging it had been operating an unregistered securities trading platform. This lawsuit followed a settlement earlier in the year over charges related to Kraken’s former staking service.
In February 2024, Kraken filed to dismiss the lawsuit, arguing that the SEC’s case relied solely on a registration-based argument regarding Kraken’s operation as an unlicensed securities entity. Kraken maintained that cryptocurrencies listed as SEC-compliant should be treated as commodities, not securities.
Kraken has since escalated its position, urging the court to dismiss the SEC claims to avoid a “significant reordering” of the US financial regulatory structure, according to court filings submitted in the Northern District of California.
The SEC opposed Kraken’s motion to dismiss, asserting that its enforcement action falls within its congressionally granted authority, emphasizing its role in enforcing registration requirements for securities intermediaries. Kraken urged the U.S. court to dismiss the SEC claims to prevent a major shift in the US financial regulatory landscape.
Stablecoin Safety Debate
There has been ongoing debate over the safety of stablecoins, specifically Tether’s USDT and USD Coin (USDC). As of April, USDT’s market capitalization of $104 billion was more than triple USDC’s $32 billion market cap. This difference is partly due to the network effect, as USDT launched in 2014, while USDC launched in 2018, after USDT had already become a popular trading pair asset on crypto exchanges. The dominance of USDT is further highlighted by its daily trading volume, which is 7.5 times higher than USDC’s trading volume.