Kraken Co-founder Jesse Powell Sees Fairness Resuming in Crypto Industry After Binance Settlement
In Brief
Kraken co-founder Jesse Powell sees fairness resuming in the crypto industry post U.S DOJ’s actions against crypto exchange Binance.
Jesse Powell, co-founder of the cryptocurrency exchange Kraken has expressed his views on the evolving fairness within the crypto industry following the significant legal settlement between Binance and the U.S. Commodity Futures Trading Commission (CFTC).
This statement comes in the wake of a series of enforcement actions by U.S. regulatory bodies against major crypto exchanges, including Binance, the world’s largest, and Kraken, a direct competitor.
Powell reflected on the implications of Binance’s hefty $4.3 billion fine settlement and its impact on the industry, in a X (Twitter) post.
He remarked that the last year has brought clarity to two critical concerns from shareholders about the rapid pace and seeming impunity with which some firms have operated. Powell noted that while Kraken’s market share may be dwindling, the recent enforcement actions, particularly against compliant entities like Kraken, underscore the challenges of maintaining faith in a competitive market.
Highlighting the necessity for self-regulation in the crypto industry, Powell emphasized the constant emergence of new threats to the industry’s reputation. He expressed concern over the potential for government scapegoating and increased regulatory constraints, stressing the importance of proactive self-policing within the sector.
The game feels a bit more fair today. The last 12 months have answered 2 nagging questions from shareholders:
— Jesse Powell (@jespow) November 23, 2023
1. How are they going so fast?
2. How are they getting away with it?
"Trust me, any day now…" is only believable for so many years. It's hard to keep faith while…
Kraken Stance on Self-Policing
In his discourse, Powell also mentioned Coinbase and Ripple, suggesting that they, along with Kraken, are easy targets for the SEC, being based in the U.S. He critiqued the approach of going after offshore entities, arguing that it’s not about consumer protection but rather regulatory exertion.
Kraken has recently faced its own legal challenges. In February, the SEC charged Kraken’s parent companies for not registering their crypto asset staking-as-a-service program, leading to a $30 million settlement.
Powell cynically remarked that such payments only buy temporary relief from regulatory actions, and suggested that U.S.-based crypto companies might consider relocating due to the costly and time-consuming nature of legal battles.
Further, Kraken’s blog post criticized the SEC’s stance, arguing that its claim of Kraken’s products being investment contracts is legally baseless and factually incorrect. The post accused the SEC of enforcing compliance with a nonexistent regulatory regime.
In his concluding remarks, Powell appealed to the crypto community for support against government overreach. He encouraged the use of services that engage in long-term strategies and set positive industry standards, noting that while these may not offer the most exotic products or zero-KYC accounts, they contribute to the industry’s sustainability.
Powell’s insights shed light on the increasing challenges facing the crypto industry, highlighting the need for balance between innovation and regulatory compliance. His comments reflect a broader conversation about the future of cryptocurrency in an increasingly scrutinized market.
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Nik is an accomplished analyst and writer at Metaverse Post, specializing in delivering cutting-edge insights into the fast-paced world of technology, with a particular emphasis on AI/ML, XR, VR, on-chain analytics, and blockchain development. His articles engage and inform a diverse audience, helping them stay ahead of the technological curve. Possessing a Master's degree in Economics and Management, Nik has a solid grasp of the nuances of the business world and its intersection with emergent technologies.
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Nik is an accomplished analyst and writer at Metaverse Post, specializing in delivering cutting-edge insights into the fast-paced world of technology, with a particular emphasis on AI/ML, XR, VR, on-chain analytics, and blockchain development. His articles engage and inform a diverse audience, helping them stay ahead of the technological curve. Possessing a Master's degree in Economics and Management, Nik has a solid grasp of the nuances of the business world and its intersection with emergent technologies.
