The crypto industry is in turmoil in the United States in the face of a harsh crackdown from the Securities and Exchange Commission (SEC), but Kraken, one of the biggest exchanges, has chosen not to be defeated. Indeed, the company plans to enter the banking world by… becoming its own bank. This announcement was made by Kraken’s legal director, Marco Santori, during the Podcast “The Scoop” organized by the media The Block.
Goodbye Silvergate Bank, hello Kraken Bank!
Kraken, one of the largest crypto exchanges, recently announced that it is preparing to launch its own crypto-bank, “Kraken Bank“, based in the state of Wyoming. This announcement has been confirmed by Kraken’s legal director, Marco Santori, during an episode of the podcast “The Scoop“.
We’re going to have these pens with the little ball chains. We will be ordering thousands of them and attaching them to the offices of Wall Street banks, everywhere and with our logo prominently displayed.Marco Santori, Legal Director of Kraken
The main objective of Kraken Bank is to create a bridge between the world of crypto and traditional finance by offering various services aimed at professionals, companies, and individuals. The Exchange team supported this same announcement.
Thus, Kraken Bank will be able to offer services such as:
- Custody of crypto assets
- A transfer and financing service
- Cryptocurrency staking
- Credit cards, etc.
The Exchange would have obtained a license “Special Purpose Depository Institutions (SDPI)” in 2020 which gives it the right to offer traditional banking services as well as crypto services.
This Kraken announcement comes at a time when Silvergate Bank is going through a difficult period. Indeed, the largest crypto bank has recently lost some of its key partners, which has jeopardized its future. Nevertheless, Kraken and other major exchanges such as Binance and Coinbase were turning to Silvergate to process their payments in Fiat.
With the launch of Kraken Bank, Kraken could become a credible alternative for crypto exchanges, but also for traditional banking services.
Kraken resists the SEC and prepares to conquer the world of finance
US regulators are imposing strict regulations on crypto businesses, which are currently under pressure to comply with applicable laws. kraken also had to pay a $30 million fine and suspend its crypto staking program…
Despite this, the Exchange remains committed to meeting the demands of US regulators. Nevertheless, the launch of Kraken Bank is a clear message from the Exchange to the SEC. Although the company must comply with the same regulations as traditional banks, it will come out a winner! Yes, it will be able to resume its crypto staking program without being hindered by the regulatory authorities.
It seems that Jesse Powell, the boss of Kraken, has taken the lead in the industry by creating his own crypto bank. With the launch of Kraken Bank, Kraken could become a credible alternative for crypto exchanges, but also for traditional banking services. This strategic choice could allow the Exchange to differentiate itself from its competitors and strengthen its position in a booming crypto market. It remains to be seen whether Kraken will be able to comply with current banking regulations and meet the regulatory requirements that apply to this sector…
Coming from a journalism university background, I came across Bitcoin and cryptocurrencies not long ago.
The potential of the Blockchain seduced me and I made it my research topic.