Kraken, one of the largest and oldest digital asset exchanges, was granted a Special Purpose Depository Institution charter by Wyoming on September 16, 2020. Kraken is the first digital asset firm in the U.S. to be granted a bank charter. The bank charter could allow Kraken to provide additional customer services without having to use a bank service provider.
The SPDI charter permits Kraken to take deposits from legal entities and engage in fiduciary asset management, custody and related services. Kraken is not permitted to make loans and is not required to obtain FDIC insurance. The bank charter could allow Kraken to provide additional customer services without having to use a bank service provider – for example, payment services. Further, the charter could permit Kraken to be a “qualified custodian” under SEC regulations.
The SPDI charter requires heightened reserves requirements, so it may not be as attractive as, say, trust company charters for smaller companies and start-ups seeking to enter the space. Also, an SPDI that opts not to have FDIC insurance may not be eligible for all of the regulatory benefits enjoyed by FDIC-insured banks and may not be recognized as a bank at all in some states.