Payward COO Optimistic as Kraken Raises $5 Million in Funding

Payward Inc, the operator of Kraken, has raised $5 million as part of its Series A round of fundraising. San

Payward Inc, the operator of Kraken, has raised $5 million as part of its Series A round of fundraising. San Francisco-based Kraken is a growing digital currency exchange which offers trading in Bitcoin, Litecoin, Namecoin, Dogecoin and one of the very few offering trading in Ripple.

Hummingbird Ventures led the fundraising round along with other angel investors like Barry Silbert, CEO of SecondMarket, and Trace Meyer. The majority of the funding is said to be going towards acquiring money transfer licenses, a major hurdle for any exchange or payment processor dealing in fiat.

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The company believes that while the majority of the Bitcoin market currently resides in the U.S., there is far more unlocked potential outside of it, but banks have thus far been more hesitant to become major partners with Bitcoin businesses. In the U.S., both Coinbase and Bitpay have bank partners, whereas in Canada, for example, Bitcoin businesses have struggled to even keep their accounts open, often forced to hop from one bank to the next.

The exchange currently employs 25 employees and is looking to hire more as part of its aggressive push to gain market share.

DC Magnates connected with Payward Chief Operating Officer Michael Gronager on Kraken’s future outlook:

In light of recent comments from central banks such as Danmarks Nationalbank, how accommodating is the current climate towards an expanding Kraken? Would the funding be even more efficacious if central banks had more of a positive outlook?

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As Kraken is based in San Francisco, California – our current main trading area is Europe and we are the worlds biggest EUR-XBT exchange. We only serve a subset of US customers as we only take customers in jurisdictions where we have all required licenses to do so. This is the case in Europe where we have the required licenses. In some states in the US as well as some countries in the rest of the world there are no regulation for the products we offer and hence we can onboard customers there as well.

The rest of US and the rest of the world will follow, but we are not going to bend the law to grow – it would be putting our customers money at risk for being seized. So we prefer slow and steady to fast and risky.

Do you think we’ll see a spike in trading on Kraken after some recent lenient rulings in Europe with regards to taxation, such as from the Tax Board of Denmark?

Spikes are usually driven by bulls and bears, not by small countries tax boards – so, no, but it is of course nice for those of us staying in Denmark.

Kraken seems to have less than a 1% market share in trading volume. How much it is anticipated or this to rise with the new investment?

Yeah, as mentioned before, we are the number one EUR-XBT exchange, and I think many traders are paralyzed by the USD-XBT pair, as it has become kind of a de facto indicator for the value of Bitcoin. However, if you are in the Euro zone, trades at Kraken are not subject to currency exchange fees like for USD exchanges, and hence both buying and selling XBT for EUR is cheaper at Kraken. This is something that matters if you are actually moving and using your funds (depositing and withdrawing), but if you already have your funds at an exchange e.g. for day trading, switching will hardly make sense.

So we expect to grow, we already have a superior product, and we will use the investments to enable us to continue to go alone the stable and legally secure path, further improving on the regulatory side, acquiring licenses in the states, but also developing new products and services.

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