So, what's ACH and why should you care? ACH (automated clearing house) is a network for electronic transfers between banks and financial institutions in the US. It's super convenient, fast, and cheap, which is why many crypto users love it for moving money between bank and exchange accounts.
source
Silvergate is a crypto-friendly bank that's been providing ACH services to lots of crypto exchanges, including Kraken. In 2019, Kraken joined the Silvergate Exchange Network (SEN), allowing for instant and fee-free transfers via ACH.
But here's the kicker: Silvergate is one of the US banks that collapsed in early March 2023, alongside others like Silicon Valley Bank. This has caused some serious challenges for the crypto industry, as many crypto firms are exposed to Silvergate. CoinDesk reported that Silvergate had more than $5 billion in deposits from crypto clients as of December 2022.
So, what does this mean for Kraken users? Starting March 27, Kraken won't support ACH deposits and withdrawals via Silvergate. But don't worry, other services like ACH instant purchases via online banking won't be affected.
What are some alternative funding options? Here are a few:
MVB Bank for Fedwire deposits and withdrawals, though they're usually slower and more expensive than ACH transfers.
Instant purchase options like debit cards, credit cards, or Apple Pay, but with potentially higher fees or limits.
Other crypto exchanges that support ACH transfers with different banking partners, like Coinbase, Gemini, Binance.US, and eToro.
Kraken is working to bring ACH funding back ASAP through alternative funding providers, and they'll update users when they can.
The Silvergate shutdown is a wake-up call, showing that the crypto industry needs more robust banking solutions that can support growth and innovation without compromising security and autonomy. This could include DeFi, stablecoins, P2P networks, and blockchain-based payment systems.
What do you think about this Kraken-Silvergate situation? How do you usually fund your crypto account? Share your thoughts and experiences in the comments below!
@khaleelkazi
@balemo
@edicted
@taskmaster
@theycallmedan
@trafalgar
@appreciator
@acidyo