‘$60 Billion Trapped’—Inside The Plumbing Problem Kraken’s IPO Exposed

Forbes examines how weak settlement and custody “plumbing” — not ETFs or regulation — is the main barrier to institutional crypto flows. Roughly $60 billion is trapped in pre-funded exchange accounts because institutions won’t leave assets on venues, suppressing spot volumes and creating execution friction. Startups like BridgePort (off-exchange settlement) and Sodot (MPC key management) aim to let institutions pledge assets at regulated custodians and draw credit lines, shortening reallocations from hours to milliseconds. The piece warns operational security (developer/API/deployment keys) — not smart contracts — has driven recent breaches (Bybit, Resolv, Drift), and argues Kraken’s confidential S‑1 and upcoming IPO will reveal how much institutional revenue and plumbing already exist. Market impact: solving settlement and custody could unlock large institutional capital, accelerate trading volumes, and reshape revenue pools for exchanges and middleware providers, but security gaps remain a material risk to adoption.