Unconfirmed

The First Crypto Bank: What Kraken Financial Will Do and How - Ep.143

09.18.2020 - By Laura ShinPlay

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David Kinitsky, CEO of Kraken Financial, talks about Kraken's news that it is launching a bank, after receiving approval to form a special purpose depository institution (SPDI) from the state of Wyoming. He discusses:

why Kraken decided to become a crypto bank, and what it will be able to do with this status

how this status will affect the consumer experience for crypto users 

what kinds of crypto assets it will be able to deal with 

how quickly it will list coins, such as those DeFi coins that quickly balloon to billion-dollar market caps

what its designation, special purpose depository institution (SPDI) means, and why that has special meaning for crypto users

what "bailment" means, and why that's significant for crypto users interested in using a crypto bank and how that would affect users in the event any coins were stolen or lost

how Kraken Financial's status as a crypto bank will affect the longstanding problem in the industry of obtaining and maintaining bank relationships

how this overlaps and works in conjunction with other recent regulations that have affected the crypto industry, such as the OCC saying banks can custody crypto assets

how its SPDI status will affect how Kraken Financial is regulated in New York State where the BitLicense is in effect

why Kraken, which has a reputation for pushing back on what it deemed to be overreach by regulators, decided to pursue the SPDI

how Kraken Financial will make money, despite keeping 100% reserves

David's extensive background in cryptocurrency

the timeline going forward for Kraken Financial 

 

Thank you to our sponsors! 

Crypto.com: http://crypto.com

Cosmos: http://five.hackatom.org

 

Episode links: 

David Kinitsky: https://twitter.com/Kinitsky

Kraken: https://www.kraken.com/en-us/

 

Kraken announcement about Kraken Financial receiving the SPDI title from the Wyoming Banking Board: https://blog.kraken.com/post/6241/kraken-wyoming-first-digital-asset-bank/

 

CoinDesk story: https://www.coindesk.com/kraken-crypto-exchange-secures-bank-charter-under-wyoming-law

 

The Block story: https://www.theblockcrypto.com/post/77804/kraken-crypto-bank-launch-wyoming

 

Kraken Chief Legal Officer Marco Santori tweet storm on the significance: https://twitter.com/msantoriESQ/status/1306236234675740672?s=20

 

Previous episode of Unchained on crypto friendly regulations in Wyoming: https://unchainedpodcast.com/eth-denver-fireside-chat-with-2-of-the-most-crypto-friendly-governors-in-the-nation/

 

OCC allowing banks to offer cryptocurrency custody services:

https://www.coindesk.com/us-banking-regulator-suggests-federal-licensing-framework-for-crypto-firms

https://www.coindesk.com/banks-in-us-can-now-offer-crypto-custody-services-regulator-says

https://www.coindesk.com/occ-crypto-custody-years

 

Conference of State Bank Supervisors’ new regulatory regime: https://www.reuters.com/article/us-usa-regulators-crypto/u-s-crypto-fintech-firms-to-benefit-from-slimmed-down-regulatory-process-idUSKBN2661OA

 

Links from news recap:

https://unchainedpodcast.com/half-a-billion-dollars-overnight/

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