Kraken, a prominent cryptocurrency exchange, has finally entered the banking industry with the launch of Kraken Bank.
On its website, the exchange said, “We are developing a superior kind of crypto and bitcoin bank for our customers.” Kraken Financial is the name of the Wyoming-based bank, but “because to tremendous demand,” the firm will now be known as Kraken Bank.
Under the Wyoming Special Purpose Depository Institution (SPDI) structure, Kraken Bank reportedly prioritizes asset custody and security.
It specified that “Deposit accounts in USD and cryptocurrencies (like Bitcoin), different financing and payment methods, institutional custody solutions (qualified custody for advisers and broker dealers), individual retirement accounts, and many more are all on the table.”
Furthermore, it argues that it can maintain stringent regulatory monitoring, security requirements, and data protection. “We’re ready to wager that our security surpasses that of your present bank.”
Kraken noted that all SPDI banks must have total reserves, meaning user funds cannot be loaned without their consent. The exchange clarified in its Frequently Asked Questions that an SPDI is a bank regulated by the Wyoming Division of Banking.
The Federal Deposit Insurance Corporation (FDIC) will not guarantee the investments. Still, all assets will be accessible as cash or the least risky, most liquid cash equivalents, so there will be no insolvency risk that the FDIC is meant to protect against, it was said.
“We will also retain sufficient capital reserves and capital balances to support the entire accounts of all customers, including in the event of a ‘bank run,'” the business added.