Maxine Waters questions legality of Kraken’s access to the U.S. payment system

U.S. Representative Maxine Waters, a member of the Democratic Party, has requested clarification from the Federal Reserve Bank of Kansas City regarding the legal basis for granting crypto exchange Kraken access to Federal Reserve payment services.

The issue concerns a so-called special-purpose account opened for Payward Financial, operating as Kraken Financial. This account provides access to the Fedwire interbank settlement system. Previously, Kraken operated through intermediary banks, whereas it can now interact directly with Federal Reserve infrastructure. The account does not accrue interest on reserves.

In a letter to Jeff Schmid, President of the Federal Reserve Bank of Kansas City, Waters requested clarification on the legal grounds for opening such an account. According to her, the concept of a “special-purpose account” is not defined in federal law or Federal Reserve documentation, raising concerns about the legality of the decision.

The congresswoman also noted that the development of payment technologies, digital assets, and related sectors is outpacing regulation, but this should not result in granting access to critical financial infrastructure without sufficient transparency and risk assessment.

Waters requested clarification on whether Kraken’s access extends to FedACH, Fedwire, and cash operations, whether there are limits on overdrafts and balances, and whether additional regulatory requirements apply. She also asked whether the account opening was coordinated with the Federal Reserve and other agencies. A response is expected by April 10.

Previously, Waters criticized U.S. regulatory decisions regarding the crypto industry, including opposing leniency toward Binance founder Changpeng Zhao and pointing to insufficient activity by the SEC in regulating crypto companies.

See also: "Coinbase opposes latest version of CLARITY Act — Punchbowl"

#Fed #USA #Kraken #Crypto Regulations

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