Kraken Fed account fight could shape how crypto firms get direct payment access
ICBA is pressing the Federal Reserve Bank of Kansas City to treat Kraken Financial’s limited-purpose Fed account as an active renewal test before the one-year term ends. The bank group wants the Fed to review whether the account still fits access guidelines and, if needed, tighten conditions, suspend, not renew, or terminate it. Kraken’s approval is limited to Fedwire Funds access, with no intraday credit, discount window access, interest on balances, or use by other Payward entities. ICBA argues the arrangement leaves operational, legal, reputational, and illicit-finance risks insufficiently addressed, especially given concerns tied to crypto ATM fraud and liquidity flows. Recent federal and state actions against parts of the kiosk ecosystem add pressure, though they do not target Kraken Financial itself. The dispute also intersects with the Fed’s broader proposal on payment accounts for uninsured institutions and Governor Barr’s concerns about AML/BSA oversight. No public record shows Kansas City Fed has opened termination proceedings; the next step is whether it changes the account, seeks more information, or lets renewal proceed.
