Following the agreement between the U.S. Department of Justice (DOJ) and Binance, the leading global cryptocurrency exchange, Jesse Powell, co-founder of Kraken, a major competitor in the same field, shared his perspective on the current state of the cryptocurrency industry.
Powell’s statements come shortly after the U.S. Securities and Exchange Commission (SEC) filed a new lawsuit against Kraken, raising concerns about the reputation and regulatory challenges facing the market at this time.
In a post on the X platform, Powell emphasized Kraken’s commitment to the long-term success of the cryptocurrency industry despite regulatory obstacles. He acknowledges that recent events, such as the DOJ’s agreement with Binance, contribute to the perception that the industry is becoming more equitable.
The established agreement implies that Binance will pay a fine of $4.3 billion, marking a significant enforcement action by U.S. authorities against a major player in the industry.
The game feels a bit more fair today. The last 12 months have answered 2 nagging questions from shareholders:
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…
— Jesse Powell (@jespow) November 23, 2023
Powell addresses questions raised by shareholders over the past year, especially those related to the rapid growth of exchanges and their apparent ability to operate without significant regulatory consequences. He highlights the challenges faced by the “good actors” in the industry as market share decreases.
The co-founder of Kraken emphasized the importance of self-regulation within the industry, given that dubious operations and illicit activities continue to emerge. He points out that these incidents provide opportunities for governments to impose stricter regulations on cryptocurrencies and strengthen their control over the market.
Kraken Stands Against the SEC
Powell discusses the SEC’s stance on regulatory enforcement, suggesting that Kraken, as well as Coinbase and Ripple, are perceived as “easy targets” by the regulatory authority.
He notes that these companies are within the jurisdiction of the SEC, making them more accessible targets compared to offshore offenders. Powell argues that the SEC’s actions may not necessarily prioritize the protection of investors but instead focus on cases within their immediate reach.
Furthermore, Kraken challenged the legal arguments of the SEC in the lawsuit. The platform contends that the SEC’s claim that its products constitute investment contracts lacks legal basis and is factually incorrect.
The exchange argues that there is no existing legislation supporting the SEC’s position, describing the accusation as baseless and arguing that the regulatory body is demanding compliance with a non-existent regulatory framework.
The company’s stance highlights the ongoing legal disputes between exchanges and regulatory authorities regarding the interpretation of existing securities laws.
The community must closely monitor the development of regulatory disputes, especially the conflict between Kraken and the SEC, and the impact it will have on the cryptocurrency market.