Kraken is reported to be pursuing the plans to launch its own bank even when the prevalent regulatory environment is challenging, per Marco Santori, chief legal officer, Kraken. Santori states Kraken’s banking relationships are secure, given that Kraken has a “diversified group of banks all around the world.”
Marco Santori has reportedly stated, Kraken Bank is very much on track to launch, very soon. We’re going to have those pens with the little ball chains. We’re going to order thousands of them and attach them to the desks of Wall Street banks everywhere. With our logo.
The ambitious step to launch its own bank comes after a recent closure of its on-chain staking services for U.S. clients. Kraken is also bracing to settle the U.S. Securities and Exchange Commission (SEC) charges alleging securities laws’ violation.
Notably, Kraken’s planned bank is set to be established just when the crypto sector as a whole is dealing with the billion dollar FTX turmoil. The FTX fallout has attracted multiple enforcement directed towards the Cryptoverse in the recent weeks as regulatory uncertainty soars.
Last month, SEC Chair Gary Gensler reportedly stated that the Kraken settlement (fines totaling $30 million) should “put everyone on notice in this marketplace.”
Kraken’s legal officer reportedly didn’t discuss the SEC settlement but clarified that staking doesn’t amount to a considerable percentage of Kraken’s revenue. Per Santori, Kraken doesn’t admit or deny either of the SEC allegations in the said complaint.
Santori states, It does of course affect pretty dramatically our product mix in the U.S. It’s really indicative of a pretty unfortunate situation here stateside.
We’ve got a regulatory environment that is essentially forcing users off to use offshore exchanges that will gladly accept their business with so little as a VPN.
Per Santori, the legal initiation by the SEC against Kraken would compel the American clients seeking staking services to explore offshore exchanges posing a higher risk. Kraken’s chief legal officer reportedly does not believe that regulators are intentionally and in a planned manner cracking down on the crypto sector in the United States.
Santori said, There’s definitely not some anti-crypto group that meets every week in some shadowy room in D.C. But there are a group of regulators who happen to all feel roughly the same way about crypto …
I think they just believe basically in one fundamental thing, that what crypto is today is what’s important, and what it will be or could be in the future is really not.
But he believes that a cautionary approach on the banking side could potentially limit innovation in the cryptocurrency sector.
