Kraken’s Chief Legal Officer, Marco Santori, says,
“Kraken Bank is on track to launch, very soon.”
The development occurs at a turbulent moment for the cryptocurrency industry, which is still struggling with the severe repercussions of the failure of the cryptocurrency exchange FTX. During the past several weeks, there have been a number of enforcement actions, which have made the regulatory environment more unpredictable, notably in the US.
The Securities and Exchange Commission (SEC) is now investigating the firm to see if the exchange sold unregistered securities to American customers.
Because securities are not subject to the same amount of regulatory monitoring as other financial products, they are seen as having a higher risk. Although Gary Gensler, chairman of the U.S. SEC, urged Dave Ripley, the company's new CEO, chose not to register with the SEC. The biggest cryptocurrency exchange, Binance, has also experienced consequences for dealing in unregistered securities.
The exchange noted that staking had only represented a minor portion of its income but declined to comment further on the SEC settlement. None of the claims made in the lawsuit are acknowledged or refuted by Kraken.
Kraken said on March 1 that it will stop utilizing the cryptocurrency-focused Signature Bank. Non-corporate Kraken customers will no longer be able to use Signature to make deposits or withdrawals in US dollars. On March 15th, the deposit function will be discontinued, and on March 30th, the withdrawal option will be discontinued.
On CoinMarketCap, Kraken is now the third-largest cryptocurrency exchange by volume. Regulators' continuing investigation does not bode well for the sector. Kraken has paid $362,000 to resolve a lawsuit involving sanctions breaches with the Office of Foreign Assets Control (OFAC).
