Kraken Founder Blasts SEC for Alleged ‘Assault’ on America
Kraken co-founder Jesse Powell has expressed his anger toward the United States Securities and Exchange Commission (SEC) after the regulatory body sued his crypto exchange for purported violations of securities laws.
In a Nov. 21 tweet, Powell criticized the regulator, referring to them as “USA’s top decel.” This term is commonly used in tech circles to insult someone who slows progress. Powell also claimed that the SEC wasn’t satisfied with the $30 million settlement Kraken agreed to pay earlier in February.
The co-founder stated, “USA’s top decel is back with another assault on America. The masochists haven’t been happy with the beatings they’ve been taking in NY and are shopping for a different flavor of RegDom in CA. I thought we settled all their concerns for $30m in Feb. Now they’re back for seconds?”
Powell went on to warn other crypto companies to extricate themselves from “the US warzone” to avoid expensive legal battles. He advised, “$30m buys you about 10 months before the SEC comes around to extort you again. Lawyers can do a lot with $30m but the SEC knows that a real fight will likely cost $100m+, and valuable time. If you can’t afford it, get your crypto company out of the US warzone.”
The SEC’s lawsuit against Kraken stems from the exchange’s failure to register the offer and sale of their crypto asset staking-as-a-service program. As part of the settlement, Kraken ceased offering crypto-staking products and services to U.S. customers and paid a $30 million fine.
Powell’s sharp comments were made following the Nov. 20 lawsuit from the SEC, which accused Kraken of multiple securities law violations, including failing to register with the agency as a securities broker and commingling customer and corporate funds.
A Kraken spokesperson denied the allegations, describing the lawsuit as “disappointing.” The spokesperson added that the exchange would defend its position in court.
In a follow-up blog post, Kraken refuted the SEC’s commingling accusations, stating that they were simply spending fees they had already earned and that the regulator did not allege any user funds were missing.
As the legal battle between Kraken and the SEC continues, the crypto community is closely watching the outcomes as it pertains to future regulatory action within the United States.
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