Karnsey Bank opens up to the plate after Silicon Valley Bank collapses

Tech-focused banks that offer services to startups and VCs have run into financial difficulties over the past few weeks. Silicon Valley Bank, the 16th largest bank in the US, collapsed last week after a run on deposits left the bank with $2 billion shortfall. The collapse of the company sent shockwaves to thousands of startups and venture capital firms. The panic was caused by the venture capital community that SVB was created to serve and cared for.

A week earlier, Silvergate Capital shut down its operations days after the bank liquidated its assets in a huge loss to cover over $8 billion in withdrawals due to the broader crypto market meltdown.

The collapse will have a huge impact on the US venture-backed startups and the broader tech ecosystem for many years to come. The fallout has created opportunities for a new tech and a friendly bank to cater to startups, VCs and investors who are displaced by Silvergate and Silicon Valley Bank. One exchange Kraken is stepping up to the plate and opening a bank to support users in the industry with the launch of a bank.

Kraken Bank, a digital asset bank, is a digital asset bank that provides banking services for digital currency and digital asset holders. Kraken Bank was designed for digital currencies via the Wyoming Special Purpose Depository Institution SPDI framework, which is meant to help the bank put asset custody and safety first.

Kraken said that all of the SPDI banks must keep their reserves full, meaning user money can't be lent out without user permission. In addition to that, the exchange also claimed it can maintain strict regulatory oversight, security standards, and data protection, arguing,

Kraken said the investments won't be insured by the Federal Deposit Insurance Corporation FDIC, but all assets will be available as cash or the least risky, most liquid cash equivalents, meaning that there won't be an insolvency risk the FDIC is intended to protect.

The company said that it will keep a large capital reserve and surpluses of our own capital to cover the full balance of all clients, even in the event of a bank run.

In 2011, the San Francisco-based Kraken was founded by Jesse Powell as the 5th largest criptocurrency exchange by volume, with a 24 hour volume of over half a billion dollars. It provides spot and futures trading betweenBitcoin,Ethereum, and over 40 other digital assets.