Top Democrat on House committee questions Kraken’s Federal Reserve account
Maxine Waters, who would likely take the House Financial Services Committee gavel again if Democrats win the House, sent a letter to the Kansas City Fed.
What to know:
- Kraken’s recent victory in getting a limited version of a Federal Reserve master account is under some scrutiny from a senior lawmaker in the U.S. House of Representatives.
- Representatives Maxine Waters, the senior Democrat in the House Financial Services Committee, sent a letter to the president of the regional Fed bank that approved the first-ever account for a crypto firm.
- Her questions may carry additional weight as the calendar progresses toward this year’s congressional elections in November, when the majority could swing to her Democratic Party.
U.S. Representative Maxine Waters, the ranking Democrat on the House Financial Services Committee, is questioning the limited “master account” obtained by crypto exchange Kraken from the Federal Reserve Bank of Kansas City, which she said raises potential consumer-protection issues and questions about the approval process.
Waters, who is likely to return to the chairman seat on the committee if the Democrats regain a House majority in this year’s elections (set at an 84% chance in current bets on Polymarket), sent a Thursday letter to the president of the Kansas City arm of the Fed system, Jeff Schmid. She suggested that the unusual approval for a “limited purpose account” at Kraken, which allows the firm to become the first to win direct access to Federal Reserve payment services, is on unclear legal footing.
“The announcement raises questions about the approval because neither statute nor the Federal Reserve Board’s Account Access Guidelines refer to a ‘limited purpose account’ type,” she wrote in the letter. “Accordingly, I write to request that you clarify the terms of Kraken’s account access approval and provide additional information regarding the process and considerations informing the approval.”
