Kraken Lightning Network Is Now Suspended Support For German Client

Key Points:

• The Kraken Lightning Network feature was suspended for German customers because of “technical changes.”
• Aside from Germany, Kraken is also facing a lawsuit from the U.S. SEC over allegations of operating an unregistered securities exchange.

Kraken axed the ability for its customers in Germany to use the Lightning Network, citing “technical changes” as the reason behind the move. The change was first thought to be because of issues relating to regulation, but Kraken has subsequently cleared up that misunderstanding.

Read more: Kraken Seeks Jury Trial In Ongoing SEC Lawsuit

Kraken Lightning Network Was Discontinued for German Users

Crypto news outlet Protos reported on Friday the company’s Kraken Lightning Network support agent pointed to “regulatory issues” as the reason. However, Kraken’s spokesperson has told Decrypt that this was not correct. The exchange then told the media outlet the reason was “technical changes,” without any further explanation.

The Lightning Network is an off-chain scaling solution for Bitcoin that enables speedier and cheaper transactions. It employs side channels to perform transactions, enabling users to make smaller payment channels without involving the actual blockchain main network, which eventually settles the transactions in bulk.

The feature has been most attractive for those users seeking to make small purchases with Bitcoin at a much cheaper rate. It can handle around 5,200 BTC and is the key feature that customers were looking for in the need for faster and cheaper transactions.

Kraken Faces Legal Challenges Amid Service Adjustments

Kraken emphasized that while they try to provide state-of-the-art services, sometimes difficult decisions are needed to ensure a reliable and secure platform for clients in Germany.

“We unfortunately sometimes have to make tough decisions to ensure we can offer a reliable and secure platform for as many clients in Germany as possible,” said the company.

The announcement of the Kraken Lightning Network had been made in 2021, but its materialization happened in 2022. Large swathes of users in Germany had already adopted the network for its privacy-centric model. Beyond Germany, Kraken is also dealing with legal issues in the U.S., where the SEC is suing the company for allegedly running an unregistered securities exchange.