Following the collapse of Silvergate Bank, the crypto exchange Kraken has decided to end support for ACH deposits and withdrawals from 27 March 2023. It is one of the many crypto exchanges using Silvergate Exchange Network (SEN) for ACH settlements in the US since 2019.
Kraken Faces the Impact of Silvergate Bank Collapse
On Wednesday, Kraken sent an email to its customers, notifying the upcoming restrictions on the deposit and withdrawal methods on the exchange. It came as the crypto platform faced issues after the crypto-friendly lender’s collapse.
However, the termination of ACH deposits and withdrawals will be temporary, as Kraken is already searching for a new banking partner to reinstate these services. “Our team is working to make ACH funding available again as soon as possible,” Kraken stated.
In addition, the crypto exchange specified that users would no longer see a deposit option via Plaid or a withdrawal option via ACH Silvergate. All other deposit and withdrawal services will be in place, “including ACH instant purchases via Online Banking.”
On top of that. the exchange urged crypto traders and investors to use alternative funding options on the platform, including MVB Bank for Fedwire deposits and withdrawals. Other instant purchases will continue to work.
Crypto Exchanges Need a New Banking Infrastructure Provider
Kraken is one of many cryptocurrency exchanges operating in the US that faced the consequences of Silvergate Bank’s and Signature Bank’s recent collapse. Both were crypto-friend banks and offered real-time settlement infrastructure. Silvergate discontinued its settlement infrastructure as the bank decided to go into voluntary liquidation.
Meanwhile, Signature Bank’s Signet continues to operate even after the lender went under the Federal Deposit Insurance Corporation (FDIC) receivership. However, the fate of Signet remains in the doldrums.
Coinbase is another crypto exchange that recently stopped supporting Signet and is looking for a new banking technology partner. However, several other crypto platforms stopped using Signature Bank’s infrastructure even before the collapse of the bank. Winklevoss twins’ Gemini was one exchange that terminated deposits and withdrawals through Silvergate ACH and wire transfers on 2 March as the bank shares plummeted.
Bybit was another crypto exchange to temporarily suspend US dollar withdrawals on 10 March, following Binance, the global arm of which suspended USD deposits and withdrawals in February. However, neither of these two exchanges clarified if the troubles at Signature Bank or Silvergate Bank have impacted them.