Kraken runs its UK business through three different entities registered with the Financial Conduct Authority — a setup that illustrates the fragmented state of crypto regulation in Britain today. The exchange uses Payward Limited for anti-money laundering compliance, Payward Services Limited for its EMI license, and Crypto Facilities Limited for derivatives authorization. None of these registrations offer the full consumer protections that traditional finance users get, like access to the Financial Services Compensation Scheme.
Why the structure matters
The UK is moving toward a more comprehensive crypto framework that will cover custody, trading, and stablecoins. But that regime doesn't take effect until October 2027, and firms can't even apply until September 30, 2026. Until then, companies like Kraken have to stitch together existing regulatory categories — a patchwork that leaves gaps in oversight and consumer safeguards.
Kraken's multi-entity approach isn't unusual. Many crypto firms in the UK operate through similar structures because the current rules weren't designed for digital assets. The FCA's cryptoasset registration, which started in 2020, focuses almost entirely on anti-money laundering and counter-terrorist financing. It doesn't cover conduct risk, market abuse, or customer asset protection in the way a full prudential regime would.
What the new regime means for Kraken
When the broader framework finally arrives, Kraken's existing regulated presence could give it a head start. The exchange already has relationships with the FCA, compliance infrastructure, and authorized entities in place. New entrants will have to build all of that from scratch. That's a real competitive advantage — assuming the new rules don't force major structural changes.
But users should keep one thing in mind: regulatory registration in the UK right now doesn't mean the same protections they'd get from a bank or a stockbroker. The FCA is clear about that. No FSCS coverage, no ombudsman for most complaints. The patchwork is real, and it's not going away until at least late 2027.
The clock is ticking
Applications for the new regime open in just over two months. The FCA will have a busy stretch reviewing firms that want to operate under the expanded rules. For Kraken, the question is whether its three-entity structure will fold neatly into the new framework or require yet another reorganization. Either way, the exchange is better positioned than most — but the next year will test how well the patchwork holds together.
