Crypto Exchanges in Regulatory Mode: Kraken Launches DeFi Offering, Bitget Focuses on Vienna

Institutionalization Meets Regulatory Pragmatism

The crypto industry is undergoing a phase of strategic realignment. Two recent developments exemplify how established platforms are attempting to make decentralized technologies accessible to mainstream users while simultaneously ensuring regulatory compliance. Kraken is simplifying access to DeFi yields through a centralized interface, while Bitget is taking the European regulatory landscape seriously with an EU headquarters in Vienna.

Both approaches illustrate a fundamental shift: crypto platforms are no longer positioning themselves as mere infrastructure providers, but as full-fledged financial service providers actively shaping the tension between innovation and regulation.

The Facts

Kraken announced the launch of DeFi Earn on January 28, 2025, a product that enables customers to access onchain yields from decentralized finance protocols directly through their existing Kraken accounts ^[1]. The offering aims to eliminate technical barriers such as external wallets, seed phrases, or complex smart contract interactions ^[1].

The technical infrastructure is based on DeFi vault provider Veda. At market launch, three USDC vaults operated by Chaos Labs and Sentora are available ^[1]. The vaults automatically distribute deposited funds across established onchain protocols such as Aave, Morpho, Sky, and Tydro, where assets are lent to borrowers ^[1]. The platform currently advertises yields of up to eight percent per year, with returns being variable and dependent on current market demand ^[1].

John Zettler, Director of Earn Products at Kraken, stated: "With DeFi Earn, we're transforming decentralized finance from a niche topic into an everyday financial instrument" ^[1]. Users receive information about current interest rates, applicable fees, and potential risks before each deposit. Yields are displayed in real-time and credited directly to accounts ^[1]. The product is initially available to customers in 48 U.S. states, Canada, and the European Economic Area ^[1].

In parallel, international crypto exchange Bitget has concretized its Europe strategy. Oliver Stauber was appointed as the new Europe chief, moving from competitor KuCoin, where he had served as CEO since November 2024 ^[2]. Bitget simultaneously announced the establishment of an EU headquarters in Vienna, with operational launch planned following receipt of authorization under the EU's Markets in Crypto-Assets (MiCA) regulation ^[2].

Bitget was founded in Singapore in 2018 and is particularly active in crypto derivatives trading. According to CoinMarketCap data, the platform ranks among the five largest crypto exchanges worldwide by trading volume and claims to serve over 100 million users in more than 150 countries ^[2]. The company plans to submit its application for a MiCAR license with the Austrian Financial Market Authority, followed by gradual staff buildup in Vienna ^[2].

Stauber explained that he saw a clear commitment at Bitget to building a compliant and MiCAR-capable crypto business in Europe ^[2]. Bitget CEO Gracy Chen referenced Stauber's regulatory experience and his task of building a scalable and compliant crypto platform for the European market ^[2].

Analysis & Context

The two developments reveal different but complementary strategies in the current crypto market. Kraken's DeFi Earn represents a trend toward "Custodial DeFi" – an apparent paradox that nevertheless possesses pragmatic relevance. While the original DeFi promise envisioned the disintermediation of financial service providers, practice shows that the vast majority of potential users are not willing to accept the complexity of self-custodial solutions.

Historically, similar abstraction layers have always enabled mass adoption of new technologies. No one needs to understand TCP/IP protocols to use the internet. Kraken's approach transfers this principle to DeFi, but harbors a structural risk: the centralization of access points to decentralized protocols creates new single points of failure and trust requirements. Users exchange self-sovereignty for convenience – a trade-off that Bitcoin purists may find suspect, but which is economically understandable.

Bitget's Vienna strategy, on the other hand, reflects the growing importance of regulatory compliance as a competitive advantage. The MiCA regulation, which came into force in 2024, establishes for the first time a unified legal framework for crypto assets in the EU. Platforms that acquire licenses early position themselves as trusted partners in a market increasingly shaped by institutional investors. The choice of Vienna is no coincidence: Austria combines pragmatic financial supervision with a central European location and access to the German-speaking market.

Bitget's aggressive expansion – driven by dominance in derivatives trading – could intensify competition in the European market over the medium term. Established players such as Coinbase, Kraken, and Bitstamp increasingly face Asian platforms operating with higher risk tolerance and more aggressive product development. The regulatory alignment through MiCA levels previous competitive advantages of established European providers.

For Bitcoin investors, both developments are of indirect relevance. While DeFi Earn primarily focuses on stablecoin yields, the product architecture suggests that Bitcoin-based lending products could follow – an area historically dominated by platforms like BlockFi and Celsius before their business models collapsed. The question of sustainability and risk transparency remains central.

Conclusion

• Kraken's DeFi Earn marks an attempt to make decentralized finance protocols mass-market ready through centralized interfaces – a pragmatic but ideologically controversial approach that trades self-sovereignty for user experience

• Bitget's EU expansion with headquarters in Vienna shows that MiCA compliance is becoming a strategic competitive factor and that Asian platforms are increasingly identifying the European market as a growth field

• Both developments illustrate the professionalization of the crypto industry: regulatory compliance and product abstraction increasingly dominate over technological decentralization ideals

• For Bitcoin users, the central question remains: to what extent do custodial DeFi products dilute the core promises of cryptocurrencies, and are the offered returns worth the structural counterparty risk?

• The coming months will show whether the regulatory offensive by European authorities fosters innovation or whether regulatory arbitrage drives platforms to more permissive jurisdictions