Kraken announces the closure of its NFT marketplace just one year after its launch. The decision reflects a strategy aimed at redirecting resources to more promising initiatives, while the NFT market faces a period of strong contraction.
Let’s see all the details in this article.
From November 27, the Kraken NFT marketplace will be in withdrawal-only mode, initiating a three-month period before the final closure
The cryptocurrency exchange Kraken has officially decided to close its own non-fungible token (NFT) marketplace, a move that represents a significant change in the company’s strategy.
Starting from November 27, the service will enter withdrawal-only mode, initiating a three-month period to allow users to transfer their NFTs to external wallets, before the definitive deactivation.
The announcement, communicated via email to customers, marks the end of an initiative that had started in June 2023, after months of beta testing.
At launch, the Kraken marketplace offered more than 250 NFT collections and boasted the absence of gas fees for buyers and sellers, a caratteristica distintiva compared to other operators in the sector.
A spokesperson for the company stated the following:
“We have made the decision to close our NFT marketplace so that we can redirect resources towards new products and services, including initiatives not yet announced that are in the development phase.”
This statement highlights Kraken’s intention to focus on sectors with greater growth potential, leaving the NFT market. Which is currently in difficulty, due to a general decline in interest and competition.
The decline of the NFT market
The NFT sector, once considered an emerging pillar of the digital economy, experienced a significant slowdown in 2024.
According to a report by DappRadar, the trading volume of NFTs reached an annual low of 471 million dollars in August, with a decrease of 16% compared to the previous month.
This is a drastic drop compared to the 12.6 billion dollars recorded in the same period of 2022. Unfortunately, the Kraken platform has not been immune to this trend.
In addition to the general market decline, the exchange has faced increasingly fierce competition from niche players like OpenSea and Blur.
For example, OpenSea saw a trading volume in August of 110.5 million dollars, down 27% compared to the previous month. Although there were signs of recovery in November, the market is still far from the peaks reached in 2022.
Regulation has also played a significant role in the decline of the sector.
The Securities and Exchange Commission (SEC) of the United States has intensified the scrutiny on collectible tokens, sending a Wells notice to OpenSea in August, indicating an imminent enforcement action.
The challenges of Kraken
On the other hand, Kraken itself is at the center of legal controversies with the U.S. regulatory authorities.
The SEC is examining whether the tokens traded on the platform can be considered investment contracts, subject to securities laws.
Although it is not clear whether the closure of the NFT marketplace is related to these issues, the climate of regulatory uncertainty has certainly influenced the company’s decision.
The closure of the marketplace reflects the need to adapt quickly to an evolving market. Kraken seems to want to focus on new projects, believing that the NFT sector is no longer a strategic priority.
Users of Kraken’s NFT marketplace have been invited to transfer their tokens to external digital wallets. For those using the Kraken Wallet, it will be possible to move their assets independently during the three-month period provided for withdrawal.
This transition phase will be supported by Kraken’s customer support team, to ensure that all users can recover their digital assets without difficulty.
The closure of the NFT marketplace represents a clear signal of the challenges that the sector must face.
However, it also shows how companies like Kraken are trying to reinvent themselves in a competitive and ever-evolving landscape.
Although details about the new projects in the pipeline have not yet been revealed, the exchange has confirmed that it intends to continue innovating in the field of cryptocurrencies and blockchain.
Among the possibilities, there could be products related to decentralized finance (DeFi), solutions for advanced trading, or new tools for supporting institutional investors.
