The First Crypto Bank: What Kraken Financial Will Do and How

In this episode of Unconfirmed podcast with Laura Shin, 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.

The interview was published on September 18, 2020.