Kraken's Fed Master Account Still Unactivated Months After Approval

Kraken Financial, a Wyoming-chartered Special Purpose Depository Institution, has yet to activate its Federal Reserve master account four months after it was approved in March. The delay means that customer-dollar wires are still being processed through an intermediary bank while Kraken completes technical, compliance, and operational work.

The Federal Reserve Bank of Kansas City approved Kraken's application in October 2020, but the firm has not yet activated its master account. This connection would allow Kraken to hold reserves directly with the Federal Reserve and support dollar settlement through Federal Reserve systems without relying on a correspondent bank.

Kraken previously stated that it would serve institutional clients first before expanding to broader deployment. The company's approval was granted under a specially tailored framework, which has raised questions from lawmakers about its legal basis and operating limits.