Crypto exchange Kraken launches wrapped bitcoin (kBTC) token, available on Ethereum and OP Mainnet

Backed 1:1 with bitcoin, the token will be fully custodied in Kraken Financial's U.S. qualified custody solution with a publicly viewable reserve wallet.

Major crypto exchange Kraken has announced the launch of its own wrapped bitcoin (kBTC) token on both Ethereum and OP Mainnet.

Backed 1:1 with bitcoin, the token will be fully custodied in Kraken Financial’s U.S. qualified custody solution with a publicly viewable reserve wallet for transparency.

Announced on Monday, Kraken’s kBTC will join the growing trend of wrapped bitcoin tokens, following the recent launch of Coinbase’s Wrapped BTC (cbBTC).

While there won’t be any supported spot markets for kBTC at launch, users will be able to redeem the token for the underlying bitcoin. The minimum deposit for kBTC is 0.00026 BTC (around $15). Kraken is aiming to drive DeFi adoption with this launch, having partnered with major DeFi apps like Paraswap, Yearn, and Curve.

“We believe in an onchain future and DeFi represents a key part of that opportunity,” said Mark Greenberg, Kraken’s global head of asset growth and management.

“kBTC builds on Kraken’s long history of seamless UX and top-of-the-range security, bringing DeFi to new users and accelerating the adoption of decentralized applications.”

The launch of kBTC comes as Kraken continues to face legal challenges from the U.S. Securities and Exchange Commission (SEC).

A California judge ruled last month that the SEC’s case against Kraken, alleging the exchange violated federal securities laws by failing to register as a broker, clearinghouse, or exchange, will proceed to trial.

Similar rulings have been issued in SEC cases against other major crypto exchanges, including Binance and Coinbase.

The SEC filed its lawsuit against Kraken in the Northern District of California in November 2022, seeking a permanent injunction to prevent further securities violations, as well as disgorgement of alleged “ill-gotten gains” and other civil penalties.

The SEC identified 11 tokens—ADA, ALGO, ATOM, FIL, FLOW, ICP, MANA, MATIC, NEAR, OMG, and SOL—as unregistered securities.

Kraken, on the other hand, argues that it was never required to register with the SEC, as it does not operate as an exchange, broker-dealer, or clearing agent within the definitions set forth in the Exchange Act.