Get an inside look at how cryptocurrency exchange Kraken is navigating the complex and evolving regulatory landscape with “Fighting the Fight.” Follow along as the company works behind the scenes with regulators to ensure legal compliance and maintain trust with its customers. Gain insights into the challenges of the cryptocurrency industry and how Kraken is leading the charge in responsible, transparent trading.
Kraken Fights for Federal Reserve Master Account Access
Kraken, a San Francisco-based cryptocurrency exchange, has been fighting for access to the Federal Reserve’s master account since October 2020. Although its application has not been rejected thus far, getting a master account is a major challenge for cryptocurrency firms as it would allow them to access the same system all major financial institutions use to settle transactions.
On Decrypt’s “gm” podcast, Kraken’s chief legal officer, Marco Santori, revealed that the firm is fighting hard behind the scenes to get connected to the FedNow network. This move would help Kraken to settle transactions more efficiently and provide them with increased legitimacy in the industry.
However, Kraken isn’t fighting the Fed as publicly as its crypto bank counterpart, Custodia, which is currently suing the Fed over its membership denial. Santori stated that while Kraken does a lot behind the scenes, it is not always the most effective way to get things done.
Kraken Has Been in Hot Water with Regulators
Kraken has been under scrutiny by regulators this year, and in February of 2021, the US Securities and Exchange Commission (SEC) charged the digital asset exchange with a $30 million fine for violating securities laws. The regulator claimed that Kraken failed to register the offer and sale of its crypto asset staking-as-a-service program, forcing Kraken to halt its staking service for American clients.
Kraken has not admitted or denied the allegations in the SEC’s complaint, and the fine came as part of the SEC’s crackdown on major American cryptocurrency firms. SEC Chair Gary Gensler aims to regulate all coins and tokens that he believes are unregistered securities, and a number of digital asset firms have faced charges as a result.
Although Kraken’s regulatory woes exist, Santori is optimistic about the industry overall. He believes that getting targeted by regulators is a part and parcel of being in an innovative industry like crypto, and that regulators should get involved to ensure fair practices.
In conclusion, Kraken’s fight for access to the Federal Reserve’s master account is a key topic in the cryptocurrency world. With the help of the FedNow network, Kraken could settle transactions more efficiently and gain increased legitimacy in the industry. While they’ve faced scrutiny from regulators, the Kraken team remains optimistic about the future of cryptocurrency.