Cryptocurrency exchange Kraken has launched its own bitcoin (kBTC) wrapper token, available on both Ethereum and OP Mainnet.
Thanks to the 1:1 relationship with Bitcoin, the token will be fully held in Kraken Financial’s US-based qualified custody solution, with a publicly visible reserve wallet to ensure transparency.
Wrapped tokens like kBTC allow assets like bitcoin to be used in decentralized finance (DeFi) platforms for trading, lending and borrowing. Kraken’s kBTC will join the growing trend of wrapped bitcoin tokens, following Coinbase’s recent launch of Wrapped BTC (cbBTC).
While there will be no supported spot markets for kBTC at launch, users will be able to redeem the token for the underlying bitcoin. The minimum deposit per kBTC is 0.00026 BTC (approximately $15). Kraken aims to drive DeFi adoption with this launch, partnering with leading DeFi apps such as Paraswap, Yearn, and Curve.
Kraken’s global head of growth and asset management, Mark Greenberg, said: “We believe in an onchain future and DeFi is a key part of that opportunity. kBTC relies on Kraken’s long history of seamless UX and high-level security level, bringing DeFi to new users and accelerating the adoption of decentralized applications.”
A California judge ruled last month that the SEC’s case against Kraken, alleging that the exchange violated federal securities laws by not registering as a broker, clearinghouse or exchange, will go to trial. Similar rulings have been issued in SEC cases against other major cryptocurrency exchanges, including Binance and Coinbase.
The SEC filed its lawsuit against Kraken in November 2022 in the Northern District of California, seeking a permanent injunction to prevent further securities violations, as well as disgorgement of alleged “ill-gotten gains” and other civil penalties. The SEC has identified 11 tokens (ADA, ALGO, ATOM, FIL, FLOW, ICP, MANA, MATIC, NEAR, OMG and SOL) as unregistered securities.
Kraken maintains that it has never been required to register with the SEC, as it does not operate as an exchange, broker-dealer or clearing agent under the definitions set forth in the Exchange Act.
