Kraken is on track to launch bank 'very soon' despite regulatory 'weird place'

Quick Take

  • Kraken is moving ahead with plans to launch its own bank despite a challenging regulatory environment, Marco Santori, Kraken’s chief legal officer, told The Block’s Frank Chaparro on The Scoop podcast.
  • Kraken’s banking relationships are secure, Santori added. 

Kraken is moving ahead with plans to launch its own bank despite a challenging regulatory environment and the recent shuttering of its on-chain staking services for U.S. clients to settle U.S. Securities and Exchange Commission charges that it violated securities laws. 

"Kraken Bank is very much on track to launch, very soon," Kraken's chief legal officer Marco Santori told The Block’s Frank Chaparro on The Scoop podcast. "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."

A new bank born from the crypto sector would come at a tumultuous time for an industry still dealing with the widespread fallout from the collapse of FTX. There have been multiple enforcement actions over the past several weeks and rising uncertainty on the regulatory front. SEC Chair Gary Gensler said last month that the Kraken settlement, which included $30 million in fines, should "put everyone on notice in this marketplace."

Santori declined to discuss the SEC settlement in detail, but said that staking had been a small percentage of Kraken's revenue. Kraken neither admits nor denies any of the allegations in the complaint, he added.

"It does of course affect pretty dramatically our product mix in the U.S.," he said, adding that the SEC moev will push American clients who want staking services offshore to far riskier exchanges.

"It's really indicative of a pretty unfortunate situation here stateside," he 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."

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