Kraken co-founder hails ‘more fair’ playing field as DOJ fines Binance
Kraken co-founder Jesse Powell welcomed the results of the Binance investigation in a post on X (formerly Twitter) and highlighted the importance of long-term oriented visionaries and shareholders.
Over the past 12 months, major crypto exchanges such as FTX and Binance have come under federal scrutiny by US government agencies for allegations ranging from misappropriating investor funds to violating anti-money laundering (AML) regulations.
According to Powell, the probes provide the most sought-after answers. How fast do they go? And how are they disappearing?
Powell sees Binance and former CEO Changpeng “CZ” Zhao's legal action as a positive step, because “going after the worst criminals offshore takes effort.” US-based crypto businesses like “Kraken, Coinbase and Ripple are all easy targets, sitting right in their backyards,” he said.
The game is a little fairer today. The past 12 months have yielded 2 troubling questions from shareholders.
1. How fast do they go? 2. How do you get away with it?
“Trust me, any day now…” It's only been believed for so many years. It's hard to keep faith at this time…
— Jesse Powell (@jespow) November 23, 2023
Following CZ's recent allegation that Binance violated AML requirements, Powell emphasized the importance of self-policing to improve the industry's reputation:
“Each covert operation represents an opportunity for governments to crack down on cryptocurrency and tighten its nose.”
He further called on the community to “cooperate in restoring the image of the crypto ecosystem by recommending reliable services that play the long game. He also supported the Know Your Customer (KYC) requirement as long as it helps new users to use cryptocurrency legally.”
Related: Crypto Community Responds to Kraken Allegation, Deaton ‘Disgraceful' Gensler
Despite Kraken's long-standing approach, the US Securities and Exchange Commission sued Kraken on November 20 for commingling customer funds and failing to register with the regulator as a securities exchange, broker, dealer and clearing agency.
The lawsuit alleges that crypto assets are securities under US law.
“Without registering with the SEC in any way, Kraken has simultaneously acted as a broker, dealer, exchange and clearing agency with respect to these crypto asset securities.”
A spokesperson for Kraken told Cointelegraph that it does not agree with the SEC's complaint and plans to defend itself in court. The spokesperson added, “It is unfortunate to see the SEC continue its path of enforcement that harms American consumers, stifles innovation, and undermines America's competitiveness globally.”
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