15th April 2025 > > Kraken & HRMC.

tl;dr

A rare note of praise for Kraken from the CCC, as it works towards the mass adoption of cryptos by all investors.

Market Snap

Market Wrap

In the context of recent market vol, there is nothing of interest in today’s market moves.

Curious Cryptos’ Commentary – The threat to TradFi

I am not, and never have been, a user of Kraken, a centralised cryptocurrency exchange. CoinMarketCap ranks it 13th on its list of spot exchanges with $1.2bn of volume in the last 24 hours. I guess the business is doing fine without me.

The crossover between TradFi securities broking and cryptos broking has been limited in scope. Morgan Stanley sells BTC spot ETFs over its TradFi platform. PayPal, Robinhood and Revolut, all sell a limited range of cryptos alongside their stock offerings. Fidelity does too. I think that mostly covers the space. Kraken might be about to shake up this cosy world of (largely) not competing with one another.

Kraken has launched a stock and ETF trading platform for 11,000 US-listed stocks and ETFs, commission-free, to US investors in some states, within an SEC-regulated subsidiary:

https://blog.kraken.com/product/equities/stock-and-etf-trading

Arjun Sethi, Kraken’s Co-CEO, explains:

“Crypto isn’t just evolving, it’s becoming the backbone for trading across asset classes, such as equities, commodities and currencies. As demand for 24/7 global access grows, clients want a seamless, all-in-one trading experience.”

One cannot argue with that sentiment.

Tokenisation is built into the foundations of this new platform:

“Fractional trading: Own a percentage of high-priced stocks using fractional shares – available across thousands of listed assets.”

Note there will also be 24/7 trading of these tokenised assets, a feature that is a killer app against the TradFi platforms that do not respond in kind, whichever jurisdiction they specialise in, for Kraken’s ambitions are greater than just this limited launch:

“This is just the beginning, and we plan to swiftly extend stock trading to clients in more U.S. states shortly, followed by key international markets, such as the U.K., Europe and Australia.”

…

In much the same way that Coinbase’s mullet (https://www.curiouscryptos.com/post/11th-april-2025-mullets-scammers) is bringing the untold benefits of DeFi to investors without the need for private keys, or even a basic understanding of blockchain technology, all within a regulated environment, now Kraken is threatening to bring tokenisation to investors, again without the need for private keys, or even a basic understanding of blockchain technology, all within a regulated environment.

These are vital steps on the march towards wholesale crypto adoption by retail investors, without them even knowing about it.

Curious Cryptos’ Commentary – HMRC

For the tax year 2024/2025, HMRC has introduced a dedicated section for reporting crypto capital gains and losses, which is an interesting development.

These are the questions that HMRC now wish you to answer:

Number of disposals

Disposal proceeds

Allowable costs (including purchase price)

Gains in the year, before losses

Losses in the year

Are you making any claims or elections?

Tax on gains on the disposal of an asset of this type reported on Real Time Transaction returns already paid

All seems simple and straightforward enough, except for the “Real Time Transaction returns” which refers to the government’s longer-term desire to claim tax from you immediately it is due, and not just monthly for PAYE and annually for all other tax liabilities. Which would be fair enough except that HMRC is renowned for its inability to accurately calculate tax due (strangely enough, always in the wrong direction from the taxpayers’ point of view), and I remain sceptical that tax refunds would ever be made in real time.

What are the chances of HMRC ever becoming an efficient and effective organisation? Yeah, I agree. Pretty close to zero.

What are the chances of my scepticism being misplaced? Yeah, I agree. Pretty close to zero.

…

I note two interesting observations, one that is minor, and one that may come to inform the UK government’s current anti-crypto platform.

On HMRC’s website, each of those questions above is qualified by “(optional)” immediately afterwards. I am tempted to assume that means that crypto capital gains are optionally taxed. I will let you know how I get on with that line of thinking in my discussions with HMRC, which do take up so much of my time.

More importantly, HMRC will now be able to summarise total CGT raised from cryptos separate from the total raised from all other disposals of capital assets. This can only be because the Treasury department, under the aegis of Chancellor Rachel Reeves when she finds spare time that isn’t spent on fabricating her CV, wants greater granularity on this point.

This is either a very positive development, or a very negative one.

In the former scenario, Reeves will look at the CGT accruing from crypto gains, in the context of the UK’s lack of corporate tax dollars from crypto firms all of which are heading to the EU and the US and force a change of stance from the government to become crypto friendly, to boost both revenue streams to then fritter away.

Or Reeves will look at the numbers and go “ooh, I can tax that more” and add a super-tax to crypto asset capital gains, thus killing that avenue of revenue generation, in the name of “protecting” UK investors.

I leave it up to you to decide which is the likelier outcome.