The exchange moves forward despite recent regulatory challenges
Kraken has revealed plans on setting its own bank in the coming future. The company is moving ahead with this decision despite market uncertainty and regulatory setbacks, Marco Santori, Kraken’s chief legal officer, shared with the The Block.
“Kraken Bank is very much on track to launch, very soon,” Santori said. “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 to the desks of Wall Street banks everywhere. With our logo.”
Regulators have been recently paying a close attention to the crypto-industry, amid FTX’s infamous downfall and other events. Kraken itself had to pay the authorities $30.3 million in the last four months, even as it tries to adhere to necessary legal norms.
At the end of November Kraken agreed to pay $362,000 as part of the settlement with the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) for violations of sanctions against Iran. As part of the settlement, Kraken also agreed to invest an additional $100,000 in certain sanctions compliance controls.
The exchange also announced the settlement with the U.S. Securities and Exchange Commission (SEC), who charged it with violating the securities laws. It had to shutter its on-chain staking services for U.S. clients and agreed to pay $30 million.
Santori did not delve into the SEC case, but stated that staking was a minor part of the company’s revenue stream. At the same time he noted that SEC move will push the U.S. clients to seek alternative staking solutions at riskier exchanges.
“It’s really indicative of a pretty unfortunate situation here stateside,” Santori said. “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.”
Santori also said Kraken was not affected as a result of Silvergate issues. Silvergate is one of few prominent banks in the crypto space. After revealing financial problems, major exchanges and other industry players stopped working with it. And last week its holding company, Silvergate Capital Corporation, announced about shutting down operations entirely.