Kraken, a popular cryptocurrency exchange, has introduced its self-custody wallet for digital assets, joining the ranks of other major exchanges like Binance, OKX, Coinbase, Bitget, and Bybit.
The Kraken Wallet, known as multichain Kraken Wallet, can be used by anyone, whether they are a Kraken client or not. It serves as a gateway to the decentralized financial system. Currently, the wallet supports assets on eight blockchains, including Bitcoin (BTC), Ether (ETH), Solana (SOL), Optimism, Base, Arbitrum, Polygon, and Dogecoin (DOGE).
The developers of the wallet emphasize its commitment to privacy and data protection. They claim that the app collects only the essential data required to function as a wallet, and it does not collect any internal app performance analytics. In terms of security, the wallet offers mobile biometrics and user password protection. The code of the app has been audited by Trail of Bits and is available on GitHub as an open-source project.
In terms of functionality, Kraken Wallet supports decentralized finance (DeFi) tokens, nonfungible tokens (NFTs), and interaction with decentralized applications (dApps) through Wallet Connect. It also provides customer support around the clock.
Eric Kuhn, the product director for Kraken Wallet, emphasized the importance of self-custody wallets for the existence of permissionless financial access. He stated, “Kraken Wallet is how we invest in the your keys, your crypto ecosystem.”
The increasing adoption of self-custody wallets by cryptocurrency exchanges can be attributed to the tightening regulatory environment they face worldwide. To navigate these regulations, exchanges have turned to self-custody wallets as they are not subjected to the same rules as money transmitters.
For example, Kraken recently announced that it is winding down support for the Monero privacy token in Ireland and Belgium due to regulatory concerns. Last year, the exchange also suspended support for several stablecoins, including Tether (USDT) and DAI, for its Canadian users.
However, there have been some positive developments for self-custody wallets in terms of regulations. The European Parliament eliminated a 1,000 euro limit on cryptocurrency payments from self-hosted wallets as part of new Anti-Money Laundering laws. In the United States, a court ruling stated that Coinbase Wallet is not considered a broker and is therefore not subject to brokerage rules set by the Securities and Exchange Commission.
In related news, the Trust Wallet iOS app is currently under investigation by US authorities for a potential vulnerability.