The regulatory crackdowns in the crypto space aren't scaring Kraken... in fact they're pushing forward with plans to launch their very own bank!

On a podcast with The Block on Monday, Kraken's chief legal officer Marco Santori confirmed that "Kraken Bank is very much on track to launch, very soon."

On Twitter, the official Kraken support account also chimed in saying the the bank "will initially be available to existing Kraken clients in the U.S. with potential international expansion in the future."

The crypto exchange recently settled a case brought against them by the SEC, having to pay $30 million in fines and had to cease offering crypto asset staking services to U.S. customers.

But that hasn't deterred them from their banking plans...

Back in 2020, Kraken had initially received the approval from the State of Wyoming to form a Special Purpose Depository Institution (SPDI). If you're wondering what that is exactly, it's a type of bank that can receive deposits, custody assets, provide asset management services, and other banking related services.

According to the new Kraken Bank website, the institution will offer "a more seamless integration between crypto and the traditional financial system... with cryptocurrencies represented as a first-class citizen."

And while the deposits in Kraken Bank won't be FDIC insured, they promise to be "fully reserved" with no fractional reserve banking or re-hypothecation.

"All assets will be kept on hand and available as cash or the least risky, most liquid cash equivalents. We will also maintain significant capital reserves and surpluses of our own capital to cover the full balance of all clients, even in the event of a 'bank run'," wrote the website.

The new crypto bank is planned to have a phased launch in 2022 and will roll out to existing U.S. Kraken clients first.

There's been a lot of excitement since Yuga Labs began the countdown for its TwelveFold NFT auction, which we reported on yesterday.

And today, we've got the results!

From a financial standpoint, it was yet another success for the company that's already struck gold with the Bored Ape Yacht Club collection. 

When all was said and done, the TwelveFold auction generated 735.7 BTC. For those of you aren't good with currency conversion, that's about $16.5m in USD.

The top bid fetched a whopping $160k while the lowest accepted bid snuck in at just over $50k.

As for timelines, the 288 winning bidders are expected to receive their inscriptions within one week, while those who didn't make the cut will have their bid amount returned to their receiving address within 24 hours.

Cue the controversy

Despite the financial success of the sellout auction, it didn't go down without a little bit of controversy...

That's because a few people in the cryptosphere had a problem with how the auction was conducted.

Why's that?

Because Yuga Labs required participants to submit a bitcoin transaction before the auction even closed. And for the vast majority of people who ended up with an unsuccessful bid, they'll need to trust Yuga Labs to manually send their bitcoin back.

Now... we don't think anyone is expecting Yuga Labs to rug pull everyone, but some people are justifiably worried about the precedent this auction could set.

Here's what Twitter user @veryordinally had to say:

"Yuga is establishing REALLY bad precedence running an auction like this. They are taking custody of bidders' bitcoin with a promise to send back unsuccessful bids. Not doubting they'll do that, but this model is a scammer's dream, and credible players need to set better example."

But that wasn't the worse of it... 

The actual creator of Ordinals, had this to say:

"If I, personally, Casey Rodarmor, ever see you, Yuga labs, the entity, fuck around with degenerate bullshit like this again, I will wash my hands of you forever and encourage others, including those close to me to do the same."

Moving forward

Bitcoin Ordinals are still a new technology that companies are just starting to explore.

And although auctions are currently being conducted in a suboptimal way, they're likely necessary baby steps on the road to mass adoption.