Kraken prepares for a new banking partner following Silvergate bank collapse

Kraken prepares for a new banking partner following Silvergate bank collapse

The collapse of the three biggest banks in the United States has forced associated exchanges to review their functionaries. Famous crypto exchange Kraken has announced that they will stop the use of automated clearinghouses (ACH) from 27 March onwards.  

On 8 March the California-based bank, Silvergate bank, was shut down by regulators. The Silvergate capital corporation, the holding company for Silvergate bank announced the news and said this decision was taken to protect the investors. Two other banks, the Silicon Valley Bank and the Signature bank, collapsed due to regulatory frameworks. 

After the collapse of the Silvergate bank, crypto exchange Kraken has decided to find a new banking partner. The suspension of automated clear housing (ACH) is effective from 27 March. According to the reports, Kraken clients will not be able to use withdrawal and deposit services through Silvergate. Kraken is a United States-based crypto exchange, founded in 2011. It is a comprehensive marketplace where buyers, sellers, and traders exchange cryptocurrencies like bitcoin and ethereum. 

An automated clearinghouse (ACH) is a United States financial network used for digital payments. It is popularly known as a direct payment technology. A person can transfer funds from one account to another without using paper cheques, credit cards, or wire transfers. 

However, the suspension is only temporary after finding alternative funds transfer platforms, the services will be resumed. Kraken will send a detailed message to every client regarding this suspension to inform them about the full process. 

Kraken is not the first exchange to suspend its services after the collapse of Silvergate bank before that cryptocurrency exchange, Bybit announced the temporary suspension of a few services. On March 10, the cryptocurrency exchange platform Bybit announced that they are suspending US dollar-denominated deposits and withdrawal services through bank transfers, including SWIFT transfers. 

The suspension of these exchanges related to Silvergate bank will affect the clients. After the collapse of three major crypto-friendly banks in the United States alarmed the exchanges and they cut off their ties to protect themselves from any disaster. 

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