Two weeks ago, Kraken Financial received the first Special Purpose Depository Institution (SPDI) charter from the Wyoming Banking Division to much fanfare. With the hard work of well-known players such as Tyler Lindholm (R-Sundance) and Caitlin Long, CEO of Avanti Bank, the foundation has been established for Wyoming to be the most crypto-friendly jurisdiction in the U.S. Now that the laws are passed and the charter is issued, it is up to the Wyoming Banking Division regulators to begin the first-ever crypto bank examinations.

By way of background, I have prior experience at the Federal Deposit Insurance Corporation (FDIC) where I have examined banks in Texas, Louisiana, and Arkansas. Almost always, banks have a combination of federal and state examiners if the charter is issued by the state, with either the FDIC or the Federal Reserve as the federal regulator. If the charter is national, the Office of the Comptroller of the Currency (OCC) will examine the bank, meaning only federal regulators go on bank examinations.

However, Wyoming’s new SPDI charter for Kraken Financial creates a very unique circumstance that I believe has created ‘Unicorn Regulators’ for Fintech, who are at a historic moment in preparing for digital asset bank examinations, similarly to when the FDIC began its first exams in 1933 and the OCC started exams in 1863. I had a unique opportunity to spend some time speaking to both Commissioner Albert L. Forkner of the Wyoming Banking Division and Chris Land, General Counsel, to get an inside view of this historic moment in bank examinations. Below is my Q&A with them.

Jason Brett: All regulators started somewhere from scratch. Whether it was the FDIC in 1933 about to conduct its first examination, there is likely a sense

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  • Recent financial market returns point to investors shifting cash to safe havens and growing more concerned about a slowing economic recovery, Jason Draho, head of asset allocation in the Americas for UBS, said Monday.
  • After the September tech-stock correction ended, investors lifted long-dated Treasurys, the US dollar, and large-cap growth stocks. Cyclical assets including gold, small-caps, and high-yield bonds sank.
  • The shifts “are consistent with investors seeking (relatively) safe assets as concerns rise about moderating growth and inflation disappointment,” Draho said.
  • Market participants can expect high growth uncertainty to “delay a sustained rotation towards more economically-sensitive assets,” Draho added.
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September brought heightened stock market volatility and a mass rotation out of tech giants, but the most recent week of returns signals a new concern gripping investors.

Returns across the stock, bond, currency, and commodity markets point to increasing risks to economic growth and inflation, Jason Draho, head of asset allocation in the Americas at UBS, said in a Monday note. Last week saw investors pivot back to long-dated Treasurys, the US dollar, and large-cap growth stocks.

More cyclical assets such as small-cap stocks, emerging market equities, gold, and high-yield bonds all tumbled over the period. Inflation expectations fell and 10-year real rates climbed slightly, reflecting a more bearish outlook toward price growth.

The returns data can easily drive “spurious conclusions,” but the shifts “are consistent with investors seeking (relatively) safe assets as concerns rise about moderating growth and inflation disappointment,” Draho wrote.

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Those investors aren’t without cause for concern. While some facets of the economy have roared back to their