Kraken Reveals It Won’t Comply With New York Attorney General’s “Insulting” Probe

  • Kraken CEO Jesse Powell revealed the cryptocurrency exchange won't comply with the New York Attorney General's probe.
  • Per his words, the move is insulting, and helps justify the exchange's move to leave the state in 2015.

San Francisco-based cryptocurrency exchange Kraken isn’t going to respond to the inquiry New York Attorney General Eric Schneiderman sent 13 different cryptocurrency exchanges. Per Jesse Powell, Kraken’s CEO, the probe is insulting.

Schneiderman’s probe is part of a new Virtual Market Integrity Initiative, which as covered plans to “promote accountability and transparency” in the cryptocurrency markets. As part of its initiative, Schneiderman’s office sent the cryptocurrency exchanges 34-point questionnaires, instructing them to have them complete early next month.

While most cryptocurrency exchanges reportedly reacted positively to the probe, publicly revealing they looked forward to cooperating with the regulators, Kraken made it clear it doesn’t plan on answering the questionnaire.

Via Twitter, the exchange’s CEO wrote:

“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.”

Jesse Powell

In his comments, Powell alluded to Kraken leaving the state of New York in 2015, when the state’s Department of Financial Services (NYDFS) introduced the BitLicense, causing a “Great Bitcoin Exodus.” The controversial license required crypto-related businesses to go through a rigorous regulatory process before serving the state’s residents.

Through a blog post at the time Kraken – one of the biggest cryptocurrencies exchanges in the world – called the BitLicense a “creature so foul, so cruel that not even Kraken possesses the courage or strength to face its nasty, big, pointy teeth.”

Powell noted that Kraken is generally happy to help regulators understand crypto exchange’s the ecosystem, but added that the New York Attorney General’s Office was using a “tone-deaf” approach, and argued the state was hostile towards not only cryptocurrencies, but businesses in general.

In his tweet, he even asked why the company didn’t probe businesses actually operating in the state of New York, reaffirming the exchange left the state because of similar moves. He noted:

“Somebody has to say what everybody's actually thinking about the NYAG's [New York Attorney General’s] inquiry. The placative kowtowing toward this kind of abuse sends the message that it's ok. It's not ok. It's insulting.”

Jesse Powell

Featured image via YouTube,Economist Test Prep