Kraken continues bank launch plans amid regulatory hurdles

Kraken is still steadfast in launching its bank, despite facing a harsh regulatory landscape and several charges of violating securities laws by the US Securities and Exchange Commission. 

According to Marco Santori, the Chief Legal Officer at Kraken, the launch is on track. He even shared plans to order thousands of pens with little ball chains attached to them, which will be distributed to Wall Street banks and adorned with Kraken’s logo. The company has not let regulatory obstacles deter its progress and is pressing ahead with its plans to establish its financial institution.

Launching a new bank from the cryptocurrency sector is bold because the industry is still grappling with the aftermath of FTX’s collapse. The past few weeks have seen several enforcement actions and growing uncertainty regarding regulations.

Gary Gensler, the SEC Chair, stated in the previous month that the $30 million fine as part of the Kraken settlement should serve as a warning to everyone in the marketplace.

When asked about the SEC settlement, Santori chose not to delve into the details but confirmed that staking only accounted for a small fraction of Kraken’s revenue. Additionally, he stated that Kraken neither admitted nor denied any of the allegations in the complaint.

Regulators prioritize the current state of cryptocurrencies

According to Santori, Kraken’s banking relationships are secure, and have a diverse set of banks worldwide. However, he also shed light on the increasing caution among banks that could impede innovation in the crypto sector. 

Santori believes the world is returning to a period where banks will be very cautious about opening accounts, making it difficult for new ideas to provide infrastructure to the crypto economy. While established companies like Wall Street, Kraken, and Coinbase may be unaffected, it will be challenging for those with novel ideas.

He clarified that no clandestine group in Washington, D.C., is dedicated to opposing cryptocurrencies. However, he acknowledged that a cohort of regulators shares a similar perspective toward crypto. 

According to the Kraken legal head, they believe that the current state of cryptocurrencies is significant, while their potential future developments hold less importance.