Maxine Waters Presses Fed Over Kraken Master Account

TLDR

• Maxine Waters asked the Federal Reserve Bank of Kansas City to explain its approval of a master account for Kraken Financial.
• She requested details about the legal basis and scope of the limited-purpose account.
• Waters asked whether Kraken can access Fedwire, FedACH, or other Federal Reserve payment services.
• She also sought information on overdraft limits, balance caps, and supervisory conditions tied to the account.
• The Kansas City Fed said it would not disclose specific account details due to confidentiality rules.

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A senior House Democrat has pressed the Federal Reserve Bank of Kansas City over its approval of a master account for a crypto firm. Representative Maxine Waters sent a letter demanding details about the legal basis and scope of the decision. She set an April 10 deadline and requested clear answers on services, limits, and oversight.

Kraken and Federal Reserve Account Access Under Review

Representative Maxine Waters, ranking Democrat on the House Financial Services Committee, sent a letter to Jeff Schmid on Thursday. She asked the Federal Reserve Bank of Kansas City to explain its approval of a limited-purpose master account. She questioned the legal authority for granting the account and requested full documentation.

Waters wrote that neither federal law nor the Federal Reserve Board’s guidelines mention a “limited purpose account.” She asked whether Kraken Financial can access FedACH, Fedwire, or cash services. She also requested details on overdraft limits, balance caps, and supervisory requirements tied to the account.

She said the Kansas City Fed declined to disclose details about account holders. She cited the bank’s statement about protecting confidential business information. She argued that transparency must guide decisions involving critical payment infrastructure.

Payment Services and Policy Coordination Questions

The Kansas City Fed granted the account to Payward Financial, which operates as Kraken Financial. The approval allows direct access to Federal Reserve payment rails for high-value dollar settlement. However, the structure excludes interest on reserves and discount window borrowing.

He said the approval would support faster deposits and withdrawals for institutional clients. The Kansas City Fed has not released operational details about the services granted.

Waters asked whether the approval involved coordination with the Federal Reserve Board or other agencies. She requested information on anti-money laundering and consumer protection reviews conducted before approval. She wrote that “answers to these questions are critical” to ensure lawful and impartial access decisions.

The Bank Policy Institute criticized the approval in earlier statements. The group said it felt “deeply concerned” about the timing of the decision. It questioned the absence of a finalized framework for “skinny” master accounts.

The Federal Reserve has worked on a policy framework for restricted master accounts. Governor Christopher Waller said last month that the proposal could arrive before year end. The central bank continues to refine the structure for limited-purpose access.

Several crypto firms have pursued Federal Reserve accounts in recent years. Custodia Bank renewed its bid through court filings in late 2025. Anchorage Digital Bank and Standard Custody & Trust Company have also applied for access.

Stand With Crypto lists Waters as “strongly against crypto” based on public votes and statements. The group cites her opposition to the Digital Asset Market Clarity Act and the GENIUS Act. Waters has not issued further public comment beyond the letter seeking clarification.

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