Kraken Co-founder Lends Support to Binance Investigation amidst Own Legal Woes
Summary:
Kraken's co-founder, Jesse Powell, perceives the recent Binance investigation as a positive development, suggesting legal proceedings against crypto exchange giants help answer questions about their speedy operations. Despite Kraken's own long-term vision, the U.S. SEC has sued the firm for allegedly mingling customer funds and for not registering as a securities exchange, broker, dealer, and clearing agency. Commenting on Binance and Kraken's legal issues, Powell underlined the importance of self-regulation and adherence to laws, while also supporting the Know Your Customer (KYC) requirements.
The co-founder of Kraken, Jesse Powell, has acknowledged the outcome of the Binance probe in a post on the platform "X", previously known as Twitter. He underscored the necessity for shareholders and visionaries who think ahead. Over the recent year, heads of major crypto exchanges like FTX and Binance have been put under tough investigation by the U.S Government for allegations that include misappropriation of investor's funds and violation of Anti-Money Laundering (AML) rules. Powell believes these investigations provide the much-asked questions: "Why are they moving so quickly?" and "How are they managing to escape?"
Powell views the legal proceedings against Binance and ex-CEO Changpeng "CZ" Zhao as a positive step and explains that pursuing the most blatant lawbreakers outside U.S jurisdiction would demand effort. He further pointed out that the US-located crypto businesses like "Kraken, Coinbase and Ripple are all easy targets, sitting right in their backyard."
Referring to CZ's recent confession that Binance didn't adhere to AML regulations, Powell emphasized the importance of self-regulation to enhance the reputation of the cryptocurrency Industry: "Every shady operation represents a chance for governments to blame crypto and intensify regulations." He also urged the community to work collaboratively towards repairing the image of the crypto environment through endorsing reliable services that "are playing the long game." He also endorsed the Know Your Customer (KYC) need as long as it aids in legally inducting new users to crypto.
However, despite Kraken's long-term approach, the U.S Securities and Exchange Commission (SEC) lodged a lawsuit against Kraken on November 20 for allegedly mixing customers' funds and failing to register with the regulator as a broker, dealer, and clearing agency for securities exchange.
The lawsuit asserts that crypto assets fall under securities contracts per U.S law: "Without registering with the SEC in any capacity, Kraken has simultaneously acted as a broker, dealer, exchange, and clearing agency with respect to these crypto asset securities."
A representative from Kraken communicated to Cointelegraph, stating disagreement with the SEC complaint. The company also expressed intentions to fight back in court. "It is disappointing to see the SEC continue down its path of regulation by enforcement, which harms American consumers, restricts innovation and injures U.S competitiveness globally," added the spokesperson.
Published At
11/23/2023 7:45:01 AM
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