• Kraken is stopping the usage of Signature Bank for non-corporate clients in terms of deposits and withdrawals.
• Signature Bank warned its banking partners that it would stop helping its crypto exchange customers process transactions worth less than $100,000.
• Silvergate Bank is being investigated by US regulators due to certain ties it had with FTX and Alameda Research.
Kraken Reduces Reliance on Signature Bank
Kraken, a cryptocurrency exchange, has announced it will no longer be using Signature Bank for processing certain transaction types. Non-corporate clients are not able to deposit or withdraw dollars from Kraken through Signature after March 15th. Additionally, customers have until March 31st to withdraw funds before this service ceases completely.
Signature Bank’s Decision
Signature Bank warned its banking partners in January that they would no longer be helping crypto exchanges process transactions worth less than $100,000. This decision came one month after the bankruptcy of FTX sparked contagion across the sector. Silvergate Bank, which had ties to both FTX and Alameda Research, experienced a bank run following this event and is currently under investigation by US regulators. The financial report scheduled for March 16th was unable to be released due to operational issues related to these events as well as their shares being down 58% on the day.
Consequences For Crypto Companies
Many other crypto companies have chosen to cut ties with banks such as Silvergate due to these unfortunate events taking place within the industry recently. As a result, many firms involved in cryptocurrency services must now look for alternative ways of handling their transactions outside of traditional banking methods if they want to continue serving their clients without any delays or disruptions in service delivery.
Kraken’s New Policy
To reduce reliance on these traditional banking methods and avoid further risk associated with them, Kraken is discontinuing the use of Signature Bank for non-corporate clients when it comes to deposits and withdrawals from their platform starting March 15th 2021 up until March 31st 2021 where all funds must be withdrawn prior otherwise they will no longer available through this method anymore afterwards –– making them inaccessible permanently afterwards once this date passes by without any exceptions made towards anyone affected either way regardlessly too!
Conclusion
In conclusion, Kraken’s new policy is an effort by them to protect themselves from any potential risks associated with traditional banking methods while also providing their customers with alternative solutions if they wish not use those instead moving forward effectively too!