Kraken Bank is ‘very well on track’, Exec assures

Kraken has had a tough time with US regulatory authorities. Despite the tough environment, the crypto exchange plans to roll out its own bank.

Marco Santori, Kraken’s head of legal affairs, revealed that Kraken Bank is well on track to launch.

Crack Bank

According to Kraken Support, the offering will initially be available to the exchange’s existing customers in the US. Potential international expansion also lies ahead.

Its official website states that Kraken Bank will be based on the Wyoming SPDI framework, enabling it to “prioritize asset safekeeping and custody, data protection, security standards and strict regulatory oversight.”

It further explained that SPDI banks are required to maintain full reserves, meaning user funds will not be lent out without their consent. This is a major bone of contention that has gained much notoriety, especially after the dramatic collapse of FTX, which allegedly embezzled customer deposits in favor of its sister trading firm Alameda.

The website claimed that all assets will be kept on hand and available as cash or, the least risky, most liquid cash equivalents. Kraken Bank will also have significant capital reserves and surpluses of its own capital to cover the entire balance of all customers, even in a possible “bank run” scenario.

Kraken Bank’s launch was phased into 2022 but was delayed for unknown reasons. Meanwhile, Santori confirmed that the launch is well on track, adding:

“We’re going to have those pens with the ball chains. We’re going to order thousands of them and put them on the desks of Wall Street banks everywhere. With our logo.”

Regulatory issues

The development comes in the wake of SEC chief Gary Gensler striking the California-based crypto exchange with a $30 million settlement after accusing it of failing to register its crypto asset allocation program.

Kraken agreed to terminate the service and pay the fine in disgorgement, precautionary interest, and civil fines without admitting or denying any wrongdoing. The legal officer also declined to comment on the settlement with the agency, but added that the strike function had contributed a small portion of the company’s revenue.