Kraken Pulls Plug on NFT Marketplace, Enters ‘Withdrawal Mode Only’ This Week

Kraken abruptly pulls the plug on its NFT marketplace, signaling another blow to the struggling digital collectibles market. Barely two years after its launch, the platform is already winding down, offering users only a few months to salvage their tokens before a complete shutdown in February 2025.

In an email to users, Kraken announced the marketplace will enter “withdrawal-only mode” on November 27, 2024, with users having until February 27, 2025 to withdraw their NFTs.

“After February 27, 2025, the Kraken NFT marketplace will be permanently closed, and Kraken will no longer offer NFT custody services,” the platform stated, assuring users that support is available: “Our team is ready to assist with any questions or guidance needed for withdrawing NFTs. Please don’t hesitate to contact Kraken Support.”

Launched into an already cooling market in late 2022, Kraken’s marketplace struggled to gain traction amid dwindling trading volumes and declining investor interest. The platform’s demise mirrored the short lifespan of many NFT projects, now averaging just 1.14 years, and the significant losses faced by holders.

Kraken’s decision to shut down its NFT marketplace aligned with its recent launch of Ink, a DeFi platform introduced in October. This strategic shift suggested Kraken was pivoting away from NFTs towards potentially more lucrative and less regulatory-complex areas of the crypto industry.

This move may have been influenced by the challenging regulatory landscape surrounding NFTs, exemplified by the SEC’s Wells notice to OpenSea in August, which foreshadowed potential enforcement action and highlighted the regulatory uncertainty surrounding digital collectibles. This increased scrutiny further complicated the outlook for NFTs, adding another layer of difficulty for centralized platforms like Kraken.

Furthermore, the emergence of decentralized marketplaces as a potential alternative, offering greater user control and potentially mitigating some regulatory risks, may have also contributed to Kraken’s decision

The NFT market’s decline is stark. Trading volumes have cratered since the 2021 peak, and many high-profile projects have faltered.

The market’s oversaturation further exacerbated the situation. A recent study by NFTEvening and Storible revealed that a staggering 98% of NFT projects launched in 2024 have flatlined, with creators struggling to maintain momentum in a crowded and increasingly apathetic market. Holders are also feeling the pain, experiencing an average decline of 44.5% in the value of their holdings since 2023.

“While NFTs remain an area of innovation, the market is oversaturated,” noted the NFTevening Team. “Creators need to rethink their strategies, focusing on community building and real-world utility to differentiate themselves and achieve sustainable success.”

Yona has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Daily is an official media and publication of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.

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