Despite a difficult regulatory environment and the recent closure of its staking services for US clients, Kraken is pressing forward with plans to build its own bank.
Kraken bank is coming
A new crypto-born bank would emerge as the industry is still reeling from the widespread repercussions of FTX’s crash. There has been a flurry of enforcement activity over the past few weeks, and regulatory uncertainty is growing as a result.
Last month, SEC Chairman, Gary Gensler, stated that the $30 million in fines levied as part of the Kraken settlement should “put everyone on notice in this marketplace.”
Kraken’s chief legal officer, Marco Santori, did not want to go into specifics of the SEC settlement, but he did say that staking had contributed a small amount to Kraken’s revenue, as per The Block. Instead, Kraken has bigger plans. But is it really a good idea after Silvergate’s fiasco just recently came to light?
Santori assured investors that Kraken’s banking relationships were secure and that the exchange has a diversified set of banks all over the world. This is amid Silvergate’s decision to shut down its popular Silvergate Exchange Network due to capitalization issues. He predicted a return to a period in which banks would be “extremely cautious” about the types of accounts they opened.
“We’re returning to an era where banks are going to be very cautious as to what accounts they open. Wall Street is going to be fine. Kraken and Coinbase are going to be okay. But the guy who has a new idea about how to provide infrastructure to the crypto economy, it’s going to be a really tough road over the next few years for them,” Santori explained.
Kraken as one of the largest and most trusted crypto exchanges in the world has a high chance to succeed despite the latest staking ban by SEC. According to CoinMarketCap, Kraken is the third biggest crypto exchange in terms of the trading volume.
It will be important for the exchange to establish solid regulatory foundations right from the start so that it is safe from the SEC or other regulators. The crypto industry is still well underregulated, so it might be a tough battle. Hopefully, it will be worth it.