US-based cryptocurrency exchange Kraken is establishing a fresh crypto bank despite the recent staking service prohibition by the U.S. Securities and Exchange Commission (SEC).
While responding to a tweet, Kraken Support stated that Kraken Bank is still in the works, with an initial offering to US consumers.
Marco Santori, the chief legal officer of Kraken, said the launch of Kraken Bank is pretty much on schedule, and they will have those ballpoint pens with the little chains. These will be mounted on the desktops of all Wall Street banks after the Company order thousands of them by using their logo.
Regulators are paying more attention to Silvergate and Signature, two significant crypto-friendly banks, in the wake of the recent collapse of FTX.
Kraken unmoved by current market conditions
In the final quarter of the previous year, Silvergate disclosed a $1 billion loss, indicating that the figure would be raised higher. Additionally, the filing revealed that the Federal Home Loan Bank gave it a rescue for $4.3 billion.
Also, there are growing worries that the bank may experience a liquidity crisis as a result of the delay in submitting its annual reports to the Securities and Exchange Commission (SEC). Owing to this, a number of Silvergate cryptocurrency customers have switched to a rival bank.
In addition, Signature is also under pressure as a result of the FTX crash. Because of the consequences, some cryptocurrency exchanges, including Binance, were compelled to halt their USD bank transactions. The bank also disclosed its plans to sell off the majority of its cryptocurrency deposits.
Meanwhile, Legislators in the US are attempting to lessen traditional financial firms’ exposure to cryptocurrencies. The US Treasury Department was urged by Senator Elizabeth Warren to utilize all available tools to control the crypto industry.
According to the Massachusetts Democrat senator, there is evidence that crypto threatens “National Security, Climate, Financial Stability, and Consumer and Investment Protections.”
Recently, the Federal Deposit Insurance Corporation (FDIC) notified banks with advice regarding the liquidity risks related to cryptocurrencies. Stating that, It’s crucial for financial institutions that rely on specific financing sources from companies involved in cryptoassets to monitor the liquidity risks associated with those funding sources continuously and to build up and maintain efficient risk management procedures.
Source: https://www.cryptopolitan.com/kraken-to-establish-a-new-bank/