Kraken acquires BCM, Expands Into Netherlands

United States-based cryptocurrency exchange Kraken has announced its plans to acquire Netherlands-based cryptocurrency exchange Coin Meester B.V. (BCM) as part of its European expansion strategy.

While the financial terms of the deal remain undisclosed, Kraken and BCM revealed the pending acquisition after the European Union’s implementation of the Markets in Crypto-Assets (MiCA) regulatory framework. Kraken, having obtained virtual asset service provider (VASP) licences to operate in Ireland, Italy, and Spain, sees the acquisition of BCM as a strategic move to establish a base of operations in the Netherlands.

Kraken's CEO, David Ripley, highlighted the appeal of the Dutch economy, including high cryptocurrency adoption rates, and a culture of innovation as driving factors behind the expansion.

He stated, "The Netherlands has one of the world’s most advanced economies, with a well-established culture of innovation and a high level of crypto adoption. This makes it a key market for us in our European expansion plans."

The acquisition of BCM, a crypto broker founded in 2017, is seen as an opportunity for Kraken to secure a significant position in the Dutch market. BCM's co-founder and CEO, Mitchell Zandwijken, expressed confidence in the move, stating, "Kraken is the pioneer in this field with a track record spanning well over a decade, making it the perfect steward of our business going forward. Our clients will benefit from all that crypto has to offer through Kraken’s continuous investment and innovation."

The timing of Kraken's move coincides with recent developments in the Dutch crypto landscape. Gemini, another cryptocurrency exchange, announced its decision to cease services in the Netherlands due to regulatory requirements imposed by the country’s central bank.

Gemini urged its Dutch users to withdraw their assets before November 17, 2023, with plans to re-enter the market once regulatory alignment is achieved.

Similarly, Binance, a major rival, exited the Netherlands in June after its application to register under the Dutch crypto authorization regime was rejected. Binance cited the inability to obtain registration as a virtual asset service provider (VASP) with the Dutch regulator.

Kraken's expansion into the Netherlands aligns with its broader European strategy. The company has obtained regulatory approvals in other European countries, such as an EU e-money institution licence from the Central Bank of Ireland and VASP registration from the Bank of Spain. Kraken is actively pursuing registrations in other European markets, emphasising compliance with regulatory frameworks.

The acquisition of BCM is subject to regulatory approval, including clearance from the Dutch central bank. This move by Kraken reflects a broader trend in the crypto industry, with various firms announcing their plans for European expansion, particularly in the context of the evolving regulatory landscape. Kraken's strategic moves aim to position the exchange as a significant player in the European market, taking advantage of the region's favourable markets, policies, and regulators.