- Summary:
- Kraken crypto exchange's Chief Legal Officier Marco Santori has disclosed their plan to launch a new bank for crypto payments.
The Kraken crypto exchange has shared its plan to launch its own bank. Digital asset exchanges are running out of their banking partners amid a regulatory crackdown by the US authorities. The recent developments regarding Silvergate Bank have affected the Kraken exchange’s ability to allow fiat deposits.
Silvergate Bank was processing the payments for many top crypto exchanges that, included Binance.US, Coinbase, and Kraken. However, the recent announcements from the bank suggested that it might not be able to conduct business as usual.
The delay in the bank’s financial report further created a wave of panic. Consequently, many crypto exchanges had to distance themselves from the bank at a time when bankruptcies have become a norm in crypto.
Silvergate Bank Discontinues Crypto Payments
The plan to have Kraken’s very own bank for crypto payments was shared by the exchange’s Chief Legal Officer, Marco Santori. The announcement from Kraken crypto comes just days after the Silvergate Bank stopped its Silvergate Exchange Network. The network served the top US exchanges in processing crypto payments.
According to reports, Silvergate Capital Corp had also issued a loan to MicroStrategy for its Bitcoin purchases. However, according to Michael Saylor, the firm doesn’t owe the loan to the bank till 2025. The crypto ventures of Silvergate made it one of the friendliest banks for the crypto industry as other wall street banks kept themselves at a distance from the volatile asset class.
Kraken Crypto Exchange Pays $30 Million To SEC
Just a few weeks ago, the Kraken crypto exchange had to stop the staking services for its US clients on SEC’s directions. The top US exchange was sued by SEC for providing ‘unregistered’ staking services to US citizens. According to the regulator, the crypto exchange failed to disclose the underlying risks to its investors. Kraken exchange settled with SEC for $30 million but didn’t accept or deny any charges.
According to Marco Santori, the SEC’s crackdown against staking will only divert the US crypto users to offshore exchanges. This will mean exposure to much higher risk as the origin of many offshore exchanges is unknown.