• Kraken is launching its own crypto-friendly bank in the US.
• The launch follows the exchange being granted a Special Purpose Depository Institution (SDPI) approval.
• The move comes as Silvergate, another crypto-friendly bank, faces financial difficulties following the collapse of FTX.
Kraken Plans to Launch Crypto Bank
Kraken, one of the largest cryptocurrency exchanges, has announced plans to launch its own bank in the United States. This move follows the exchange being granted a Special Purpose Depository Institution (SDPI) approval by state regulators. The new crypto-friendly banking service will initially be available to existing Kraken clients in the US with potential for international expansion in the future.
Silvergate Struggling Post-FTX Collapse
The news of Kraken’s planned bank launch comes as another crypto-friendly banking service, Silvergate is facing financial difficulties after the collapse of FTX. Silvergate has struggled to remain competitive since then and other crypto companies have faced increased regulatory pressure from authorities such as Securities and Exchange Commission (SEC).
SEC Increasing Regulatory Pressures on Crypto Companies
The SEC has been increasing regulatory actions against crypto companies recently with stablecoin issuer Paxos being one of those facing charges from them. Similarly, crypto lender Nexo recently agreed to a settlement with SEC after announcing a phased out exit from US market.
Kraken Settlement with SEC
Kraken itself is no stranger to regulatory pressures and recently agreed to pay multi-million dollar settlement with SEC over its staking services offered on its platform. Despite this setback however, it appears that Kraken is still pressing ahead with their plans for a banking service as indicated by Marco Santori, chief legal officer at Kraken who was quoted saying “the offering will initially be available to existing Kraken clients in USA with potential international expansion in future”
As more cryptocurrency exchanges are looking into providing their customers with access to banking services that are tailored towards digital assets holders and traders, it is clear that we are only beginning to see what could potentially become an industry standard for banks operating within digital asset space.