Kraken CEO Jesse Powell had strong words for New York regulators who sought to compel the San Francisco-based exchange to participate in its new Virtual Market Integrity Initiative, which demands that trading platforms be more transparent.
Earlier this week, New York Attorney General Eric Schneiderman began an inquiry into the operations of popular cryptocurrency exchanges. As part of the probe, his office sent detailed, 34-point questionnaires to 13 different exchanges -- including Kraken -- who were instructed to complete the forms by the beginning of May.
Most exchanges responded positively to the letters, stating publicly that they were looking forward to cooperating with the AG’s inquiry and increasing transparency in the nascent space.
However, Powell -- whose exchange ranks in the top 15 in daily trading volume -- struck a much more critical tone in his remarks, which he published on Twitter.
“Kraken’s BitLicense-prompted exit from New York in 2015 pays another dividend today. When I saw this 34-point demand, with a deadline 2 weeks out, I immediately thought ‘The audacity of these guys -- the entitlement, the disrespect for our business, our time! The resource diversion for this production is massive. This is going to completely blow up our roadmap!’ Then I realized that we made the right decision to get the hell out of New York three years ago and that we can dodge this bullet.”
As he alluded in his comments, Kraken ceased operations in New York in 2015 as part of the “Great Bitcoin Exodus” that occurred after the state’s Department of Financial Services (NYDFS) introduced the controversial BitLicense, which requires cryptocurrency companies to submit to a rigorous regulatory process before they can serve New York residents.
Powell said that Kraken is ordinarily quite open to helping regulators understand the exchange's business operations, as well as the nascent cryptocurrency space writ-large. However, he criticized the AG's "tone-deaf" approach, arguing that the state is a hostile environment for businesses.
“But when is it going to be enough for New York? We did all this once already, and then you gave us the BitLicense. Why don’t you try extracting this information from those businesses actually operating in your state? Kraken left New York because New York is hostile to crypto, and this ‘questionnaire’ we received today proves that New York is not only hostile to crypto, it is hostile to business,” he said.
He also blamed other cryptocurrency exchanges for "kowtowing" to the probe and others like it.
“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 concluded. “Good luck New Yorkers.”
Featured image from YouTube/Economist Test Prep.