Kraken appears to be preparing to open a limited-purpose bank in Wyoming that would let it store customers’ fiat deposits – and possibly operate in New York without a BitLicense.
The cryptocurrency exchange has opened up a position for an operations director to oversee a Wyoming special-purpose depository institution (SPDI). The job includes building out an operations team, developing systems and operational processes to be an SPDI and integrating that entity into the exchange’s platforms.
The director would also ensure the functionality of the different capabilities that come with being an SPDI bank, including access to Fedwire, Fed Master Accounts, the Automated Clearing House and correspondent banking.
It’s unclear whether Kraken has applied yet for an SPDI from Wyoming. While it and other firms have expressed interest in pursuing the charter, none have announced doing so. Kraken did not respond to request for comment by press time.
Created under Wyoming’s new blockchain-industry friendly laws, an SPDI would, in theory, solve two longstanding problems for any crypto exchange.
At CoinDesk’s Invest: NY conference last month, Wyoming officials touted the charter as a potential end run around New York’s notoriously strict BitLicense, which the Empire State is in the process of revising. Kraken CEO Jesse Powell had previously said his company stopped serving New York customers several years ago because of the BitLicense’s requirements, which he considered overly burdensome.
However, even Wyoming boosters acknowledge a court fight may be necessary to cement the SPDI’s status as a path around the BitLicense. More immediately, chartering an SPDI (which is not FDIC-insured) would allow an exchange to rely less on the handful of crypto-friendly banks to hold and transfer dollars.
Kraken is looking for someone who has been a senior leader in a bank or regulated financial services firm and understands payments, trust services, the Bank Secrecy Act, anti-money-laundering regulations and capital markets.
Having senior banking experience on staff would help the firm get through the application process. The chartering process resembles that of a traditional community bank, according to a spokesperson at the Wyoming Division of Banking. SPDIs must have procedures, officers and directors and capital requirements in place before applying.