Kraken in Battle With Regulators, Efforts Are Taking Place Behind the Scenes
According to Marco Santori, chief legal officer of Kraken, the crypto exchange submitted an application for a Federal Reserve master account in October 2020, but the US central bank has yet to reject it.
Santori stated on Decrypt’s gm podcast that Kraken is working behind the scenes to get connected to the FedNow network that major financial institutions use to settle transactions.
Acquiring a master account would enable crypto companies to access the same system used by traditional financial firms to settle transactions. However, Custodia, a crypto bank, is currently suing the Fed over its denial of membership.
Santori explained that Kraken is fighting the battle privately as it is not always effective to pursue a public fight.
Kraken was fined $30 million by the US Securities and Exchange Commission (SEC) in February for allegedly violating securities laws.
The SEC accused Kraken of not registering its staking-as-a-service program offer and sale.
As a result, Kraken agreed to stop providing the service to its American clients but didn’t accept the allegations stated in the SEC’s complaint.
Recently, the SEC has tightened its grip on the US crypto industry and wants to regulate unregistered securities’ sale and purchase. Nevertheless, the regulatory body’s head, Gary Gensler, has been criticized for limiting regulations in the country’s largest economy.
Despite the crackdown, Kraken’s Chief Legal Officer, Marco Santori, remains undaunted and thinks that regulatory involvement is expected in an innovative industry like crypto.