Prepare to launch your own bank
Efforts to establish a bank by US major crypto asset (virtual currency) exchange Kraken seem to be progressing steadily. Marco Santori, the company’s chief legal officer, made the announcement on The Block’s podcast “The Scoop.”
“The pace of bank establishment plans has taken a big step forward in the last couple of years,” Santori said. “The day when Kraken Bank will be launched is very near,” he said.
In September 2020, Kraken received authorization to establish a bank as a Special Purpose Depository (SPDI) from the State of Wyoming, USA. Since then, preparations have been made to set up a bank, but within the new regulatory framework of the SPDI, the process of setting up a bank has been very time-consuming, Santori said.
What is SPDI (Special Purpose Depository)?
SPDI is an abbreviation of “Special Purpose Depository Institutions”, a form of financial institution newly established in 2019 by the State of Wyoming in the United States. It will be possible to trade, store, and manage virtual currencies while conducting traditional banking operations. However, customers are prohibited from lending with fiat currency deposits.
Last month, Kraken was indicted by the U.S. Securities and Exchange Commission (SEC) for violating securities laws for its staking service, and reached a settlement after paying a fine of about ¥3.9 billion and suspending the provision of services to U.S. users. There is a history.
connection:US SEC: Kraken’s cryptocurrency staking service violates securities laws
In an interview, Santori said he can’t say much about the staking service, but said the bank’s efforts have been carried out in parallel with other projects. He said he hopes to launch with a bank in the United States in a way that has as much impact as possible.
Description of the Kraken
In support of Santori’s comments about setting up the bank, Kraken is answering user questions.
Kraken Bank is not open yet but on its way! The offering will initially be available to existing Kraken clients in the USA with potential international expansion in the future.
You can subscribe to Kraken Bank updates here https://t.co/m3yPoGpu2g
— Kraken Support (@krakensupport) March 6, 2023
The Kraken Bank is not open yet, but it will be open soon. The service will initially be available for existing Kraken users in the US, but may expand internationally in the future.
Kraken aims to “smoother integration between cryptocurrencies and traditional financial systems,” and has developed a number of products for institutional investors, including offering deposit accounts for not only US dollars but also cryptocurrencies such as Bitcoin. It is said that he is thinking about
Kraken Bank is not a member of the Federal Deposit Insurance Corporation (FDIC) and customer deposits are not insured by the FDIC. On the other hand, being a custodian bank, Wyoming law requires us to maintain a 100% reserve on all deposits at all times.
Cryptocurrency banks in trouble
In contrast to Kraken’s creation of a new cryptocurrency bank, Silvergate Bank, which has traditionally provided banking services to crypto-related companies, is in a tough spot.
Major cryptocurrency companies such as Coinbase, Gemini, Crypto.com, and Galaxy Digital have announced the suspension of remittance transactions with Silvergate Capital Bank. Paxos, which issues stablecoins USDP, and Circle, which issues USDC, have also joined.
Silvergate said in a filing with the SEC on Thursday that it may be “not well capitalized” and that it is “reviewing its business.” Since then, the stock has plunged more than 50%.
connection:US Silvergate stock price plunge Following suspension of trading with US Coinbase and others
The post US cryptocurrency exchange Kraken is about to launch a banking business “Kraken Bank” appeared first on Our Bitcoin News.