Kraken cryptocurrency exchange says it will not comply with New York inquiry
- In contrast to many of the major cryptocurrency exchanges contacted by the New York attorney general’s office, Kraken co-founder and CEO Jesse Powell says he won’t comply with the information request.
- “The resource diversion for this production is massive. This is going to completely blow up our roadmap!” Powell says on Twitter.
- “Legitimate entities generally like to demonstrate to their investors that their money will be protected,” says Amy Spitalnick of the NY attorney general’s office.
The head of a major cryptocurrency exchange will not comply with the New York attorney general’s request for information.
“The resource diversion for this production is massive. This is going to completely blow up our roadmap!” Kraken co-founder and CEO Jesse Powell said Wednesday on Twitter.
“Then I realized we made the wise decision to get the hell out of New York three years ago and that we can dodge this bullet,” Powell said. “Ordinarily, we’re happy to help government understand our business, however, this is not the way to go about it.”
Many cryptocurrency companies such as Kraken do not operate in New York because the state requires them to have a “BitLicense” from the New York State Department of Financial Services. Coinbase, Ripple, Circle and bitFlyer USA have the license, and itBit and the Winklevoss twins’ Gemini Trust have charters from the financial services department.
“Legitimate entities generally like to demonstrate to their investors that their money will be protected,” Amy Spitalnick, spokeswoman for New York Attorney General Eric Schneiderman, said in a statement.
“This is very basic information that any credible platform should have on hand and be willing to share with their investors,” she said.
Schneiderman’s office asked 13 cryptocurrency exchanges on Tuesday to complete a questionnaire by May 1 to share details on areas such as ownership, fees, trading suspensions and money laundering.
Coinbase, the Gemini Trust, bitFlyer USA and four other exchange operators that responded to CNBC’s request for comment expressed support for the request.
Powell was the first dissenting voice. He added in his statement that if the attorney general’s office did want to talk, “ask us for a phone call, fly yourself out to San Francisco, invite us for lunch at your office. We can tell you which industry groups to join and where to begin your research.”
Powell said the last time exchanges complied with New York’s request for information, they were encumbered with the BitLicense. “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.
The San Francisco-based exchange is the 12th largest by overall cryptocurrency trading volume over the last 24 hours, according to CoinMarketCap. For U.S. dollar-bitcoin trading, Kraken ranked fifth by market share, according to CryptoCompare.
News article credit and images via CNBC