Kraken, a prominent cryptocurrency exchange, has launched its own self-custody wallet for digital assets. This move follows the footsteps of other major exchanges such as Binance, OKX, Coinbase, Bitget, and Bybit. The Kraken Wallet app supports assets on eight different blockchains, including popular cryptocurrencies like Bitcoin, Ethereum, Solana, Optimism, Base, Arbitrum, Polygon, and Dogecoin. Users, whether they are Kraken clients or not, can utilize the multichain Kraken Wallet to access the decentralized financial system.
Kraken emphasizes that their wallet app collects only the essential data required for its functioning, and it does not collect any internal app performance analytics. The company has also taken significant security measures, including mobile biometrics and user password protection. The app’s code has undergone an audit by Trail of Bits and is open-source on GitHub.
In terms of functionality, Kraken Wallet supports various features such as decentralized finance tokens, nonfungible tokens, interaction with decentralized applications through Wallet Connect, and round-the-clock customer support. Eric Kuhn, the product director for Kraken Wallet, highlights the importance of investing in the “your keys, your crypto” ecosystem, which is fundamental for permissionless financial access.
The trend of exchanges venturing into the self-custody wallet sector has grown due to increasing regulatory scrutiny worldwide. For example, Kraken recently announced the winding down of support for Monero (XMR) privacy coin for customers in Ireland and Belgium. Last year, the exchange also suspended support for several stablecoins, including Tether (USDT) and Dai (DAI), for its Canadian users.
Self-custody wallets often operate under different regulations compared to traditional money transmitters like exchanges, as they do not process fiat money transactions. In line with this, the European Parliament removed the 1,000 euro ($1,080) limit on cryptocurrency payments from self-hosted crypto wallets as part of new Anti-Money Laundering laws. Similarly, a U.S. District Judge ruled that Coinbase Wallet is not classified as 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 U.S. authorities for potential vulnerabilities.