U.S. Representative Maxine Waters has questioned the approval of a Federal Reserve account granted to crypto exchange Kraken, raising concerns over its legal basis and consumer protections.
Waters, the top Democrat on the House Financial Services Committee, sent a letter to the Federal Reserve Bank of Kansas City seeking clarity on how the first-ever crypto firm gained access to the central bank’s payment system.
The scrutiny comes as political stakes rise ahead of U.S. elections, with Waters potentially regaining committee leadership if Democrats secure a House majority.
“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,”
Waters said in her letter.
Kraken’s approval allows it direct access to Federal Reserve payment rails, a long-sought milestone that could reduce reliance on traditional banking intermediaries.
However, the “limited purpose account” structure appears to lack clear regulatory definition, with the Federal Reserve still developing rules for similar “skinny” accounts for crypto firms.
The Kansas City Fed said it has received the inquiry and will review the matter, as other crypto firms continue to await decisions on similar applications.