Kraken, one of the largest and oldest cryptocurrency exchanges, announced on Tuesday that it’s secured a virtual asset service provider license in Ireland.
The VASP license recognizes that the exchange has demonstrated to the Central Bank of Ireland that its procedures to combat money laundering and the financing of terrorism are sufficient, among other requirements. A licensee also agrees to the government’s ongoing supervision of its platform.
It is a comparatively less rigorous permit to receive than, for example, a BitLicense, New York’s certification for digital assets companies, said Curtis Ting, Kraken’s senior managing director for global operations.
“Ireland and the Irish regulatory authorities understand crypto, and they are proactive in implementing laws that make sense and have sufficient clarity,” he told Fortune in an interview.
Kraken’s regulatory approval in Ireland isn’t the company’s first in an EU member state—Ting noted a digital assets license in Italy—but the timing of its announcement coincides with a widespread crypto crackdown in the U.S. that’s prompted firms to look abroad.
A little more than a month ago, Kraken reached a $30 million settlement with the Securities and Exchange Commission for operating its staking business, a product that let customers put cryptocurrencies in escrow in exchange for advertised annual returns of as much as 21%, according to the SEC.
The settlement joins a slew of other lawsuits and legal threats the federal government has levied against crypto firms. The SEC has also sued Gemini and Genesis for allegedly selling unregistered securities through a yield-bearing project they collaborated on called Gemini Earn. The agency notified stablecoin-maker Paxos that it was facing a possible lawsuit in February. And it’s even targeted Coinbase, a publicly traded exchange in the U.S. that has long touted its transparency with regulators and lawmakers.
In response, large crypto firms have looked to Paris and Hong Kong, for example, as more friendly bases for operations than cities in the U.S.
Ting told Fortune that while crypto’s flight abroad has gotten more attention as the U.S. government has sued and threatened to sue a variety of players, the industry’s push beyond American borders began almost two years ago.
“This is definitely a trend that’s gotten more noticed though,” he added, “particularly as an antithesis to other jurisdictions that have taken a more chaotic approach.”
He cited the European Union’s explicit attempt to regulate the industry through legislation, including a wide-ranging crypto bill set to be voted on in the first half of 2023, as an example of why firms are attracted to building out businesses in Europe. This is in contrast to what many in the industry have called the SEC’s push to regulate through enforcement.
“The flight to places like Europe,” Ting told Fortune, “is on the basis of clarity.”