2024

DappRadar

when

Crypto exchange Kraken is shutting down its non-fungible token (NFT) marketplace just over a year after its launch.
According to an email sent to clients and seen by Cointelegraph, the NFT marketplace will transition to withdrawal-only mode on Nov. 27, initiating a three-month withdrawal period before its complete closure. Kraken said the move will redirect resources to new products and services.&nbsp;
A spokesperson for Kraken confirmed the platform’s discontinuation in a statement:
<blockquote>
 “We’ve made the decision to close our NFT marketplace so we can shift more resources into new products and services, including unannounced initiatives in-development. Clients have been informed of the changes and our team will support them as they move their NFTs to their Kraken Wallet or a self-custodial wallet of choice.”
</blockquote>
The exchange fully rolled out the marketplace in June 2023, following a few months of beta testing. At its debut, Kraken featured over 250 NFT collections without charging gas fees from buyers or sellers on transactions.
Related: <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/shaq-astrals-nft-settlement" rel="" target="_blank" text="null" title="https://cointelegraph.com/news/shaq-astrals-nft-settlement">NBA legend Shaquille O’Neal signs $11M Astrals NFT settlement</a> Kraken’s decisions come as the NFT market sees a downward trajectory in 2024. According to an industry report by DappRadar, NFT trading volume reached a yearly low of $471 million in August, a 16% decline from July. NFT trading activity reached $3.9 billion in the first quarter of 2024 from $12.6 billion during the same period of 2022.&nbsp;
Along with the market slump, Kraken’s platform also faced competition from niche marketplaces, such as OpenSea and Blur. In August, trading volume at OpenSea closed at $110.5 million, representing a 27% decrease from the previous month.&nbsp;While the market <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/nft-weekly-sales-volume-158-million" rel="" target="_blank" text="null" title="https://cointelegraph.com/news/nft-weekly-sales-volume-158-million">recovered in November</a>, it still lags behind its peak of 2022.&nbsp;
<figure>
 <img alt="Kraken winds down NFT marketplace" src="https://s3.cointelegraph.com/uploads/2024-11/019369f6-92f9-7fa2-8cab-d8684b1098bc" title="">
 <figcaption style="text-align: center;">
 NFTs trading activity in August. Source: <a data-ct-non-breakable="null" href="https://dappradar.com/blog/nft-prices-down-5x-from-early-2024-highs" rel="nofollow noopener" target="_blank" text="null" title="https://dappradar.com/blog/nft-prices-down-5x-from-early-2024-highs">DappRadar</a>
 </figcaption>
</figure>
Another negative development in the NFT sector came in late August, when the Securities and Exchange Commission (SEC) <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/opensea-wells-notice-sec-nfts" rel="" target="_blank" text="null" title="https://cointelegraph.com/news/opensea-wells-notice-sec-nfts">sent a Wells notice to OpenSea</a>, suggesting an upcoming enforcement action around collectible tokens.&nbsp;
Kraken itself has been previously targeted by the agency. The company <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/us-judge-rejects-kraken-bid-appeal-sec-case" rel="" target="_blank" text="null" title="https://cointelegraph.com/news/us-judge-rejects-kraken-bid-appeal-sec-case">is currently in a legal battle</a> over whether crypto tokens traded and sold on its platform were investment contracts under the <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/what-are-the-howey-test-and-its-implications-for-cryptocurrency" rel="null" target="null" text="null" title="null">Howey test</a> and subject to <a data-ct-non-breakable="null" href="https://cointelegraph.com/learn/articles/commodities-vs-securities" rel="null" target="null" text="null" title="null">securities</a> laws. It’s unclear whether the shutdown of the NFT marketplace is related to potential further legal issues with US regulators, as such tokens still lack clear guidelines.
Related: <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/new-york-prosecutor-scale-back-crypto-cases" rel="null" target="null" text="null" title="null">NY prosecutor suggests office will scale back crypto cases</a>

Kraken winds down NFT marketplace

Cointelegraph

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