Kraken Launches Institutional Crypto Custody Solution in the US
Crypto exchange Kraken has unveiled its latest offering tailored for institutional investors in the United States: a comprehensive custody solution under its state-chartered bank, Kraken Financial, based in Wyoming. This move signifies Kraken’s strategic expansion into the institutional crypto space, aiming to cater to the increasing demand for reliable custody services among traditional finance firms.
Kraken Financial, authorized to provide digital asset custody and deposit accounts for institutional clients, operates as a segregated entity, ensuring that funds are securely held separate from the exchange. The newly introduced custody service, aptly named Kraken Custody, empowers clients to store, manage, and transfer crypto assets seamlessly within a trusted environment.
Tim Ogilvie, Head of Kraken Institutional, emphasized the importance of custody in the institutional crypto landscape, particularly amidst the recent surge in interest following the approval of spot Bitcoin ETFs. Ogilvie highlighted Kraken’s extensive experience in safeguarding client assets, positioning Kraken Custody as a core component of the exchange’s full-service institutional offering.
Kraken’s foray into the custody arena aligns with its broader institutional-focused initiatives. Last month, the exchange launched Kraken Institutional, a dedicated platform catering to the needs of institutional investors, asset managers, and hedge funds. This platform integrates various products and services, including spot trading, over-the-counter trading, and staking services, to provide institutions with seamless access to the crypto asset class.
The approval of spot Bitcoin ETFs by the Securities and Exchange Commission marked a significant milestone for Kraken, sparking increased engagement from firms seeking exposure to the crypto market. Notable players like BlackRock, Fidelity, and Franklin Templeton have entered the space, underscoring the growing institutional participation in crypto.
Kraken’s move into custody services comes amidst a competitive landscape in the global crypto custody space, with traditional finance giants making their mark. Standard Chartered, Nomura, BNY Mellon, and Deutsche Bank are among the institutions that have ventured into crypto custody, signaling the industry’s maturation and mainstream acceptance.
However, regulatory challenges remain a concern for some traditional finance players. Nasdaq halted its plans to launch a crypto custody business amid regulatory scrutiny, highlighting the complexities surrounding regulatory compliance in the crypto industry.
