Kraken to Close NFT Marketplace
Cryptocurrency exchange Kraken recently made the decision to close down its non-fungible token (NFT) marketplace, just over a year after its launch. In an email to its users, Kraken announced that the platform will transition to a withdrawal-only phase starting on November 27. Users will have three months to transfer their NFTs before the marketplace closes for good. This move is part of Kraken’s strategy to focus its resources on new projects and services that are currently in development. They are offering assistance to clients who need help transferring their NFTs to Kraken Wallet or external self-custodial wallets.
Kraken’s NFT marketplace, which debuted in June 2023 after a beta testing period, featured more than 250 collections and didn’t charge buyers and sellers gas fees. However, the closure of the marketplace reflects the challenges facing the NFT sector as a whole. According to a DappRadar report referenced by Cointelegraph, the NFT market saw a significant decline in 2024, with trading volumes dropping to USD 471 million in August—a 16% decrease from July and a major contrast to the USD 12.6 billion recorded in Q1 2022. While there has been a slight uptick in activity in November, it remains far below peak levels.
Kraken’s marketplace also faced tough competition from other platforms like OpenSea and Blur. OpenSea’s trading volume, for example, dropped to USD 110.5 million in August, a 27% decline from the previous month. Additionally, the NFT sector has been dealing with regulatory uncertainly. In late August, the Securities and Exchange Commission (SEC) sent a Wells notice to OpenSea, indicating potential enforcement actions related to collectible tokens.
Kraken itself has been the subject of regulatory scrutiny, with ongoing legal proceedings about whether certain tokens on its platform are considered securities under the Howey test. While it’s not entirely clear if regulatory concerns played a role in Kraken’s decision to close its NFT marketplace, the lack of clear guidelines for NFTs has certainly added to the challenges in the space.
