You seem to be conflating “segregating customer funds” and “having enough assets to cover customer obligations.” Both banks and money transmitters (including K

You seem to be conflating “segregating customer funds” and “having enough assets to cover customer obligations.” Both banks and money transmitters (including Kraken) need to maintain sufficient assets to cover customer obligations. The difference is that for money transmitters those assets have to be liquid, while for banks they do not have to be liquid (which is why SVB got into trouble). On the other hand, neither banks nor money transmitters need to designate specific assets as being held on behalf of customers, specifically, separate and apart from their own capital or operating accounts. Designating specific accounts or balances as being held on behalf of customers is typically what is meant by “segregating customer funds”.