Kraken: Shaping Crypto, Blockchain & Web3 In Ireland

[00:00] Podcast title introduction

[00:13] Lory: Hello and welcome to Blockchain Leaders Insights brought to you by Blockchain Ireland. My name is Lory Kehoe, Chair of Blockchain Ireland. On today’s episode we are fortunate to have Mr Brian Gahan with us, who is Managing Director Europe with Kraken. Brian you’re very welcome.

[00:30] Brian: Thanks Lory, thanks for having me.

[00:32] Lory: Jumping straight in, Brian could you tell us a little bit about yourself and also why you joined Kraken?

[00:38] Brian: Sure, Yes. So I have a background in traditional finance. I originally trained as an accountant in KPMG nearly two decades ago now. Then I moved across to London and I was working in the finance function of Morgan Stanley, obviously a large global investment bank. I took an opportunity back in Ireland in around 2015, and it was around this time that I got interested in crypto. I started listening to podcasts and coincidentally I bought my very first piece of crypto or made my first investment I should say in I think it was in early 2017 and it was on Kraken. So that’s I think that’s a nice arc. I was very very interested then in terms of down the rabbit hole with podcasts and so on over the next few years. And really kind of became aware that maybe this was a career opportunity for me. I was aware that there were some of the big players were looking to set up in Ireland. And when they did, I kept my eyes peeled. So, yeah, in 2019, took the plunge, left TradFi and into crypto. And I’ve never looked back, to be honest. I really enjoy working in the space. Came into Kraken in 2022. And I’ve been leading their Irish based e-money institution as well as MD Europe for crypto operations as well. So that involves, well, responsibility for all of our fiat and crypto operations across Europe, including all of our regulated entities and whether it’s our e-money institution, which we have based here in Dublin and also across to our VASPs across the continent. So yeah, it’s an exciting time for crypto. It’s an exciting time for Kraken and yeah.

[02:26] Lory: And do you think your background as an accountant and also your time in Morgan Stanley, lots of transferable skills?

[02:33] Brian: Oh, absolutely. Finance and crypto finance, they’re the same principles, right so? And all of the skills that I hone there, and I see it with my colleagues as well. So many, many of them have come from traditional finance background, but obviously they have of a passion and an interest in the adoption of crypto. And so really that’s, yeah, the skills that you build up in a non-crypto career are vital when you move across. And I think that they’re the type of people that you see be successful in the industry, the people who can transfer those skills and kind of harness them with their passion for crypto.

[03:14] Lory: And skills you look for when you’re hiring people?

[03:16] Brian: Yeah, yeah, for sure. We want, I mean, one of our values is crypto conviction, but client obsessed is another one, you know, so, so things like that, we want to, we want to bring our best in class product and services to our clients. And we, people who have those skills in whatever kind of sphere they’ve developed, we look for that, that’s definitely something we look for.

[03:42] Lory: Great. For those, I guess, maybe who’ve been living under a rock, but I’ve got to ask the question anyway, who are Kraken and what do they do?

[03:52] Brian: Yeah, so Kraken is one of the world’s oldest crypto exchanges. It was founded in 2011. Our mission is to accelerate the adoption of crypto and provide financial inclusion for everyone. And the way we do that is by providing 24-7 smooth funding rails, smooth, secure funding rails to people to access onto the platform and then on into so where they can purchase crypto. We have hundreds of cryptocurrencies. We have very strong liquidity and we have excellent client engagement and support, which we look to back up our services with. So we can provide a really smooth process and an educational piece as well to clients. So yeah, that’s who we are.

[04:42] Lory: And I know you said, okay, so you have an Irish focus role, but also a European role. So, What does a day look like for you?

[04:52] Brian: Yeah, that’s a typical day for me, I guess, is obviously we have an office here in Dublin, but we also are kind of a remote first company. So I kind of balance it between coming into the office in Dublin to meet, whether it’s colleagues or external parties as well, depending on my schedule, depending on my personal family schedule, you know, what suits me. And then so if I’m at home it would tend to look like a lot of calls and a lot of calls with my colleagues in the morning my colleagues in Ireland and Europe to find out what’s going on with our European operations we have within our regional operations function which I head up across Europe we have a significant amount of people based in Ireland but we also have people based across the continent, so catch up with them we have daily stand-ups where everyone kind of updates what we’re doing. Then as the day progresses, many of our colleagues in the US and on different time zones start to come online. We have more kind of calls and planning sessions and things like that about whatever the kind of hot button issue of the day is. So it could be a very varied day. But yeah, a lot of engagement and collaboration with colleagues from all over the world. And again, it all kind of comes back to our mission of accelerating the adoption of crypto. So I’m thinking about clients first. So that’s, that’s everything we do throughout the day is through, is through those lenses.

[06:23] Lory: Now there’s a few exchanges out there, right? US based or some that are, you know, that have been born out of Europe and the Middle East and APAC and so forth. What’s the difference that Kraken offers?

[06:37] Brian: I think it’s two things, right? The first thing I’ve kind of touched on it already is client engagement, right? We differentiate ourselves from the other big players or exchanges by the quality of our client engagement team. We offer 24-7, 365 support to our clients and our client base across the world. To help them get into the space, answer any questions they may have understand what they’re what they’re buying you know and this that goes from the consumer first-time investor who has five euro to spend right up to big institutions. We you know we really pride ourselves and our client engagement team and support team has won multiple awards. We also have in the under the same heading I guess you could say the Kraken and learn Centre so we want people to understand the space they’re getting into and what they’re buying. And if you go on to the Kraken Learn Centre on the website, you will see divided by categories, information on everything in the crypto space, really. So that’s one thing. The second thing I would say is security. People who are investing their funds, whether it’s fiat, crypto, whatever it may be, they want to know that those funds are safe. And that really has been a point of difference for us going back to 2011. We have a best in class security team, information security processes, procedures, certifications behind that. We have our security team led by Nick Percoco, based all over the world, again. 24-7 coverage and protecting our clients, the platform, and their assets. So they’re the two things that we really love to differentiate ourselves on.

[08:28] Lory: Got it. Okay. Absolutely. Look, security is definitely absolutely essential, in addition to the other points that you mentioned. Switching gears a little bit, there is a rumour out there that Kraken is considering Ireland as its MICAR or MICA hub. MICAR, I think, is the new term of the day or flavour du jour. If that is the case, and you probably can’t tell me yes or no, why is Ireland being considered?

[08:58] Brian: Yeah, well, Ireland for sure is being considered. And Kraken and myself certainly welcome MICAR. It provides regulatory certainty for investors, crypto companies, clients and so on and so forth across Europe, specifically within Ireland. We have a growing blockchain crypto ecosystem here. We have some of the other large players based here. Kraken itself has a significant presence and substance on the ground. We have our e-money institution, which is heavily resourced and with many people working directly on that in Dublin with me every day. We have a registered VASP here. We have a strong relationship with the regulator. We have a transparent and constructive regulator in the central bank who understand the space. And then obviously we have a kind of highly educated workforce here. We have English-speaking, an English-speaking country, and then, of course, the time zone, right? Ireland and Europe is kind of centrally located, and it kind of helps us throughout the day to deal with colleagues from all around the world. So there’s many reasons, and I think Ireland is really a strong place for Kraken to invest in the future, and I don’t see any reason why that would change.

[10:19] Lory: Okay, well, that’s great to hear. For our viewers and listeners out there, what exactly is MICAR?

[10:27] Brian: Yeah, so I think it stands for Markets and Crypto Assets Regulations. Right? And it’s a harmonised pan-European framework, regulatory framework for crypto assets. We’ve seen pan-European regulations before in in in the traditional space whether it’s uh MiFID, MiFID II or even the money institution regime which Kraken has already and passports across the European economic area from its base in Ireland. So what MiCAR provides to Kraken and consumers is a clear framework for anyone any anyone who wants to provide these services to Europe and a clear set of rules and guidelines and processes and procedures. Ultimately underpinning that is consumer protection. And that kind of aligns back to Kraken and our client obsessed value, which I’ve kind of mentioned before. So we absolutely welcome the certainty, the regulatory certainty that this provides the crypto space. And it’s certainly something that we’re appreciative that has been developed and also allows us to have a kind of level playing field across Europe. So, you know, once you’re licensed as a MICA entity in one regime or in one geography in Europe, you know that it’s the same set of rules for everybody across Europe and the same set of regulations to protect clients.

[12:05] Lory: In relation to, I guess, regulation, do you think Europe is leading the way?

[12:12] Brian: It is. It Is leading the way. And I think for players like Kraken, obviously I’ve mentioned already, we welcome them, but it provides us with the certainty to invest. Europe is a growth market for Kraken. We have invested already significantly with our e-money institution in Ireland and our various VAST registrations across Europe. But this kind of brings it all under one framework, so to speak. We will continue, Kraken will continue to invest where we have certainty and have strength and have markets, have strong markets already. So this really, really just cements and underpins that for us.

[12:56] Lory: Okay, so where the rules of the road are outlined, it just makes business possible.

[13:03] Brian: Exactly. And we’re like, on the 1st of January 25, you know, is effectively when the first MiCAR applications can be submitted and we’ve been planning for that for years and we have MiCA implementation working groups internally and it you know it allows us to plan into the future you know down into the medium long term and that’s where we’re able to do that where Kraken can do that. It allows us to think about how we invest our resources into what regions across the world. And of course, Europe is going to be central to that going forward. You know, and MECAR is a large, important factor in that.

[13:50] Lory: Yeah, I heard an interesting thing about this recently, that the US innovates, China imitates, and Europe regulates. So I don’t know whether there’s truth in all of that, but I think for some folks it rings true. For people who are new to crypto and those who are, I guess, experienced in the area, what should they look out for in 2024?

[14:16] Brian: Yeah, I think one of the big things on the horizon for anyone with an interest in the space and including those who work in the space is the BTC or Bitcoin halving, which I think we expect in April. Up to this point we’ve seen kind of cycles over a number of years and in and around the halving and what we’re seeing to date is that a continuation of that we’ve seen more interest in the space coming up to the halving and we expect that to continue afterwards. So that’s a big thing that I’d be keeping an eye on and in my personal interest in crypto, it’s something that I’d be looking at. And I mentioned podcasts already. I’m hearing a lot about it, so I’ll be keeping a close eye on it.

[15:06] Lory: So I think what we’re seeing is the reward going from 6.25 to 3.125. And then this is probably back to your Morgan Stanley days and economics background too. So that’s going to potentially changed the dynamics of how bitcoin works operates and how its mind and rewards work.

[15:29] Brian: Yeah. For sure and as I kind of previously touched on we have seen kind of obviously bitcoin goes it goes all goes back to the previous two previous decades right. We have seen halving’s or cycles around these up to this point so I think it just again it kind of generates interest and brings people into the space and that’s almost how I got into crypto as well in around 2016, 17. I started, you know, you read about these things in the media and you mightn’t, you know, you mightn’t fully understand what it is. And then I was on crack and buying Bitcoin was the next thing I knew. And then the next thing I knew, I was listening to a podcast about it. And then I just started to learn more and more, found myself working in the space and yeah, like we’re learning every day and I don’t profess to understand everything, but like I like to think that, there’s a place in the crypto space for everybody. For the new investor with five euros and right up to the expert institutions who are doing massive transactions on a daily basis. And I’m sure they have technical experts behind that. So yeah, once you go into that rabbit hole, well, I did anyway, and I’m sure it’s the same for you, Lory, given you’ve been in the space for so long as well.

[16:46] Lory: It is. I think that’s the definition of a rabbit hole, right? Exactly as you said there, you just literally, you, you have a question, you go get an answer and then you’re reading a doc, you’re watching a video, you listen to a podcast and then you’re like, you know, what just happened? To day’s weeks, months, or potentially, yeah. Um, for folks, maybe like you and me years, and we have the scars to show it. Anything else, you know, that’s kind of exciting you for 2024?

[17:10] Brian: Well, I think, as we continue like to see more and more adoption in the space,  You will have seen also about the BTC ETFs being approved in the U.S. So I think it was 11 were approved by the SEC in total. And again, this comes back to our mission. This is a net positive for Kraken. It brings more investors and people into the space. Okay, it’s a different vehicle than what we’ve seen before. But yeah, for sure, we want to go back to our mission, accelerate the adoption of cryptocurrency and financial inclusion for everyone. So we just see that as an exciting moment for crypto it’s been a long time in the making and to see it finally approved in in early January 24. It’s a very exciting time. It’s more liquidity and it’s more people brought into the space who might go down you know, to go down the rabbit hole that we’ve touched on already. So that’s something that you know we’ve been keeping a close eye on internally .

[18:12] Lory: Yeah more approvals to come.

[18:14] Brian: Oh um, specifically around BTC. Honestly I don’t know the inside in the inside workings of the thing but I would anticipate that there could be other cryptos or assets that that could be approved in the future. But that would be something I would love to see.

[18:32] Lory: Ok, absolutely. Getting back to kind of more Kraken specific stuff based on what you can share, what’s on Kraken’s roadmap for 2024?

[18:43] Brian: Yeah, for sure. So we’ve, within Europe specifically, we’ve been authorised as an e-money institution last year.

[18:54] Lory: And just, sorry, so what exactly does that mean, right? What does that license give you?

[19:00] Brian: Yeah, so an e-money institution license is a pan-European harmonised framework, which allows issuers to issue e-money. What that means in practice for a crypto firm like Kraken is that it allows us to offer safe, secure, seamless payment rails, so fiat, on-ramp, off-ramp, and safeguarding or custody of that fiat and clients across the European Economic Area. So that’s the 27 EU countries plus three others can be sure that Kraken is applying the same policies, procedures to keep those fiat assets safe and then on into the crypto economy to purchase their crypto in one of our registered VASP entities, so virtual asset service provider entities across the EU. So that’s been a huge thing for us to get to that point last year. On into 2024 we want to really kind of double down on our previous success in Europe. Europe is such a key growth market for us. And in those geographies or countries you’re going to expect to see and hear a lot more from Kraken and how we can tailor and localize our product to those various countries that we are now really, really have a strong presence in.

[20:25] Lory: And you mentioned there, the fiat rail. So effectively, this is the regulatory permission for me to be able to convert my euro into Bitcoin or Ether or whatever asset.

[20:40] Brian: Exactly.

[20:41] Lory: It’s that specific thing.

[20:42] Brian: So to deposit your euro from your bank account into the Kraken platform and then from that in your wallet, in your fiat wallet issued by Kraken. And then from there you can purchase your crypto and so on and so forth and really get into the space and take advantage of all our different crypto products that we offer.

[21:01] Lory: And that’s exactly, as you said, that’s that critical on-ramp, off-ramp phase.

[21:05] Brian: Yeah. For sure. And it really kind of chimes with accelerating the adoption of crypto to all of our client base across Europe.

[21:15] Lory: Sure, if it’s not easy, it won’t happen.

[21:17] Brian: Exactly.

[21:18] Lory: Okay. Anything else that you can shed light on for 2024 for the roadmap?

[21:23] Brian: I think that’s about it from a Europe perspective anyway. And that’s certainly my focus for the next 12 months. And really, I know we’ve mentioned it already, but MiCAR preparation, right? And getting things right and structuring our business correctly and all the policies, procedures, everything behind that. And building up the frameworks around that, whether it be compliance or operations, things like that. So that’s the real focus for us.

[21:50] Lory: Yeah, no, I know there’s a huge amount of work that goes into that. So, 100%. In terms of, I guess, Ireland and looking domestically for a second, do you think Ireland can and should become a blockchain Web3 crypto hub?

[22:08] Brian: Yes, I do. And I think, to be honest, it’s already a long way there in terms of that. You know, we see Kraken here, we see other large players who’ve chosen to put their registered or regulated entities here. I know you’ve been doing some great work with the Blockchain Ireland space for many, many years and I’ve attended the last two and it’s a really, really great event. So yeah, when I attend events like that, I see so many people, you’re shocked to see hundreds of people in an auditorium in Dublin who are working in the space and you kind of forget that there’s all these different people. You’re working in one company but I think we’re a long way there, we’re starting to build a critical mass, is what I would say. We have people who are into crypto but we also have, the traditional skills and people who have been well trained in various other industries, a young well-educated workforce and so on and so forth so I think in in many ways Ireland already is a blockchain and crypto hub.

[23:16] Lory: And speaking and working with your colleagues from Kraken in the US and other parts of the world, would they share that view?

[23:22] Brian: I think so, because that’s why Kraken has chosen to invest so heavily in Ireland to date. And I know that whether it’s our global execs, our CEO, David Ripley, and so on and so forth, obviously, they’re very, very positive about Ireland when they’ve been here before and when we speak to them on Global Town Halls. So yeah, I mean, I would like to think so. Obviously, there’s a long… You know, we can continue to, we as a country or Ireland and a crypto space can continue to build on that. And that’s what I’d love to see. But I, you know, I don’t see any reason why it won’t happen.

[23:58] Lory: So, you know, lay this on me and the Blockchain Ireland, you know, steering group now and the community in general, but, you know, how would you like to see Blockchain Ireland and Kraken work together over the coming months and years to achieve that goal? And don’t hold back, right?

[24:15] Brian: Well, I think a key part of it is working groups on different headings, whether it’s legal and regulatory, operational, you know, how we go to market, all of these kind of things. So we want to accelerate the adoption of cryptocurrency. And we think if there’s other players doing that in the space with us and we’re aligning with them and we’re bringing the best in class services to clients in Ireland and beyond across Europe, that’s the way to do that, to work together as a group in Blockchain Ireland to do that. The second thing I’d say is I know Blockchain Ireland Week is just a huge thing and I’m really looking forward to seeing how it pans out this year. And I know Kraken will be looking to take a central part in that.

[25:03] Lory: Okay, great. Okay, so working groups and the industry come together. Yeah, and look the importance of Blockchain Ireland Week. Yes, which is a shameless plug, which will be May 28th and 29th in Trinity Business School. I might as well put it in there. So we’ll be announcing that very shortly and tickets will be available.

[25:19] Lory: I guess one of the questions that we always ask people on the show, Brian, is as you’re commuting and kind of doing other different things, what podcast is your go-to?

[25:28] Brian: Yeah, well, I mean, I’ve talked about podcasts already in terms of that was kind of what helped me down the rabbit hole. Going back to one of the original ones that did that was what Bitcoin did. I have a huge interest in BTC and Bitcoin. I wouldn’t say I’m a BTC maxine but it’s certainly something I’m very very interested in. I’ve read a lot of books about whether it’s digital gold or things like that so that’s one podcast which I still listen to quite regularly or kind of dip in and out of it. Bankless is one that I’ve gotten into more recently in more recent years and it’s you know more focused on other crypto assets I would say and American based so a lot around the situation over there. And then on a personal point of view and not in crypto interest, but I like history podcasts. There’s one called A Short History of which I listen to quite regularly. I was listening to it on the car today on the way over here. So yeah, I like reading history books, so podcasts would align to that also.

[26:36] Lory: Super. Okay, fantastic. And to finish up, look, if people want to learn more about you, more about Kraken and the work that you guys are doing, you know, where do they go?

[26:46] Brian: Go to kraken.com, go to our career space, look for where we’re looking for people around the world in all different countries around the world. It has stuff about our mission there and what we’re trying to do. And then obviously the learn centre I think is a key resource for clients or non-clients of Kraken right. So it’s just a really cool space to learn about the crypto space.

[27:10] Lory: And what about you?

[27:11] Brian: I guess my linkedin page that’s probably about it.

[27:16] Lory: I know. Look you are you’re very modest individual but yeah, check out Brian on LinkedIn is probably the way to go there. Brian, thank you very much for your time and for joining us.

[27:24] Brian: Yeah, thanks, Lory. I’ve really enjoyed it. I’m looking forward to continuing the great work with Blockchain Ireland over 24 and beyond.

[27:31] Lory: Well, I hope you found that episode interesting. I know I certainly did. It was great to learn more about Kraken and hear from Brian. There were three key things that stood out for me. Number one is Kraken’s focus on the customer or customer obsession, as Brian explained, Whether that be on learning or security, both critical elements to bring more people into the crypto space and crypto world. Number two is Kraken’s focus on Europe. So obviously very important from an Irish perspective. And hopefully Ireland is selected as their MECAR hub in the coming weeks and months. And then finally, it is all about the halving, which is a really big deal when it comes to blockchain and crypto over the course of 2024, as that reward rate goes from 6.25 Bitcoin to 3.125, and there’s a lot of excitement about that. Thank you very much for watching and listening, and we’ll see you next time.