Kraken, a leading cryptocurrency exchange, has announced that it is experiencing technical difficulties with its withdrawal and deposit channel related to the automated clearing house (ACH) via Silvergate. As a result, the exchange will be unable to support ACH deposits and withdrawals starting from March 27, according to a statement released by Kraken.
The announcement has caused concern among Kraken users who rely on the ACH channel for deposits and withdrawals. According to reports, Kraken sent an email notice to its users on March 22, informing them that they will no longer see a deposit option via Plaid or withdrawal option via ACH Silvergate beginning March 27.
Kraken advised its users to take a look at the other available funding options in order to ensure an uninterrupted funding experience. These include MVB Bank for Fedwire deposits and withdrawals as well as other instant purchase options. The exchange assured its users that no other services will be affected by this change, including ACH instant purchases via Online Banking.
“Our team is working to make ACH funding available again as soon as possible,” Kraken stated.
Silvergate, which is one of the crypto-friendly U.S. banks, collapsed in early March alongside other lenders like Silicon Valley Bank. The events have posed major challenges for the cryptocurrency industry due to many crypto firms holding significant exposure to the banks.
Kraken is one of the world’s largest cryptocurrency exchanges, trading more than $1 billion daily, according to data from CoinGecko. In 2019, Kraken joined the Silvergate Exchange Network, which allowed the firm to offer deposits and withdrawals in U.S. dollars from Silvergate accounts.
However, Kraken is not the only crypto exchange that has been forced to halt ACH deposits and withdrawals via Silvergate. On March 2, Winklevoss brothers-founded exchange Gemini also stopped accepting customer deposits and processing withdrawals through Silvergate ACH and wire transfers.
The situation has raised concerns about the stability of cryptocurrency exchanges and the need for more reliable funding options. While Kraken and Gemini have advised users to use alternative funding options, the situation highlights the need for more robust systems and infrastructure to support the growing crypto industry.
Despite the challenges, the crypto industry continues to grow and mature, with more traditional financial institutions looking to enter the space. As previously reported by Coin Telegraph, JPMorgan Chase has launched a new cryptocurrency trading platform, while Goldman Sachs is reportedly exploring the possibility of launching a cryptocurrency custody service.
Overall, the crypto industry has come a long way since the early days of Bitcoin and other cryptocurrencies. While there are still challenges and uncertainties, the industry is rapidly evolving, and there is a growing sense that cryptocurrencies have the potential to become a mainstream asset class in the not-too-distant future.
