- Kraken’s strategic move to establish its institutional custody service in Wyoming, a state known for its crypto-friendly regulatory environment.
- By operating under Wyoming’s special purpose depository institution (SPDI) charter, Kraken aligns itself with the state’s progressive stance on cryptocurrency regulation.
Crypto exchange Kraken has introduced a new institutional custody service, leveraging its Wyoming bank charter license. Known as Kraken Institutional, the service ensures deposits are stored in segregated accounts separate from the exchange and on a full-reserve basis.
This move comes as Wyoming continues its efforts to establish clear regulatory frameworks for the crypto industry, with Kraken being a prominent supporter of these initiatives. The state, known for its vast cattle population, has enacted numerous laws related to crypto since 2016, with Kraken being a key player in this regulatory landscape.
Kraken’s achievement of obtaining a banking charter in the U.S. back in 2020 marked a significant milestone in the cryptocurrency space. However, it has taken nearly three years to navigate through the necessary legal and compliance procedures to launch a bank and introduce Kraken Financial to the market.
With the unveiling of Kraken Institutional, the exchange reaffirms its commitment to providing institutional-grade services while complying with regulatory standards. Additionally, Kraken Institutional aims to operate as a qualified custodian under the Securities and Exchange Commission’s proposed Safeguarding Rule, which is yet to be finalized.
Looking ahead, Kraken plans to enhance its offerings by introducing a smart order routing tool designed to provide access to highly liquid order books across various platforms. This tool, set to be integrated into Kraken Institutional later this year, aims to optimize execution quality and pricing for clients.
Leading the Way in Institutional Crypto Custody
Kraken’s launch of its institutional custody service in Wyoming signifies a significant step forward in the maturation of the cryptocurrency industry. By leveraging its state-chartered banking license, Kraken reaffirms its commitment to providing institutional-grade services while navigating the evolving regulatory landscape.
With Wyoming’s proactive approach to crypto regulation and Kraken’s pioneering efforts, the exchange sets a precedent for other platforms to follow suit in offering secure and compliant custody solutions for institutional clients. As the industry continues to evolve, Kraken remains at the forefront, driving innovation and fostering trust in the crypto ecosystem.
Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
