April 10 : Crypto giant Kraken’s landmark Federal Reserve master account comes with restrictions aimed at mitigating risks, but it – and others likely to follow in its wake – could still create vulnerabilities for the U.S. financial system. 

Founded in 2011, Wyoming-based Kraken is one of the world’s largest crypto exchanges, with both retail and institutional clients. Last month, it became the first-ever crypto company to win a Fed master account. The Kansas City Fed granted Kraken a “limited- purpose” account for one year initially, but neither party disclosed details of its restrictions. 

Fed master accounts are often likened to bank accounts for banks, letting accountholders move funds directly via the Fed’s payment rails.

The…