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Crypto Exchange Kraken Hires Bush Administration Prosecutor as General Counsel

Last Updated March 4, 2021 5:08 PM
Josiah Wilmoth
Last Updated March 4, 2021 5:08 PM

San Francisco-based cryptocurrency exchange Kraken has hired a former federal prosecutor appointed by President George W. Bush to serve as its general counsel.

Business Insider  reports that the exchange, eighth-largest in the world with a daily volume of just under $350 million, has hired Mary Beth Buchanan, the first woman and youngest-ever person appointed US Attorney for the Western District of Pennsylvania.

Buchanan, formerly of legal firm Bryan Cave, will work out of New York, which is notable given Kraken CEO Jesse Powell’s fiery response to New York Attorney General’s probe into the operations of cryptocurrency exchanges.

“Somebody has to say what everybody’s actually thinking about the NYAG’s inquiry. The placative kowtowing toward this kind of abuse sends the message that it’s ok. It’s not ok. It’s insulting,” he said.

The AG’s office set its sights 13 trading platforms, including many — like Kraken — that do not operate in the state. Though former AG Eric Schneiderman has since resigned due to allegations of physical abuse, the agency has said that the inquiry will continue.

State-level regulators haven’t been the only ones turning up the heat on the cryptocurrency, however, and many firms have begun building out their legal teams with experts in fields such as securities regulation and anti-money laundering compliance.

On Thursday, reports emerged that the Department of Justice (DOJ) has opened a criminal investigation into allegations of market manipulation on cryptocurrency exchanges.

The probe, which is still in its early stages. is specifically targeting instances of “spoofing,” a strategy where traders enter false orders to deceive others into buying or selling a particular asset. Investigators are also focusing on “wash trading,” a process through which trading platforms or other market participants artificially inflate trading volume by repeatedly making and then fulfilling their own buy and sell orders.

As CCN.com has reported, Kraken recently said that — despite the increased attention it will bring from regulators — the company will “probably” pursue registration with the Securities and Exchange Commission (SEC) as a broker-dealer and alternative trading system (ATS).

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