Crypto Exchange Kraken Received 475 Disclosure Requests from Regulators in 2018

  • Kraken exchange reveals it received 475 disclosure requests from regulators in 2018.
  • Most requests came from US-based regulators, followed by UK and Japan.

United States-based cryptocurrency exchange Kraken has created and published an infographic that shows the statistics of disclosure requests it was sent by regulatory authorities throughout the world.

Being transparent doesn't necessarily make you vulnerable, according to Kraken’s business and management philosophy. Soon after the exchange operator’s CEO Jesse Powell openly questioned the lack of clarity regarding American fintech RIpple Labs’ involvement with the XRP cryptocurrency, Kraken has released a detailed infographic titled “2018 Transparency Report.”

The report reveals that the San Francisco-based exchange received around 475 different requests from regulators last year. The number of disclosures requested in 2018 is nearly 3 times those made in 2017, over 6 times 2016’s, and nearly 12 times 2015’s number.

315 Requests From US-Based Market Regulators

During the final quarter of 2018, there was notably a significant increase in the number of requests from regulators worldwide, with 65 requests sent to Kraken in October, 44 in November and 47 in December. 66% of requests the EU, Japan, and Canada-operated cryptocurrency trading platform received in 2018 were from the US; 13% from the UK; and about 7% were from Germany.

In total, there were 315 requests from US-based market watchdogs. The US Department of Homeland Security made the most requests (91), followed by the US Federal Bureau of Investigations (67), and the Drug Enforcement Administration (40) requests.

The US Securities and Exchanges Commission (SEC) made relatively fewer (19) requests in 2018, which may be surprising considering Kraken is a cryptocurrency exchange, a sector which the SEC has been monitoring closely. A tweet from Kraken’s official Twitter account noted: 

You can see why many businesses choose to block US users. Cost of handling subpoenas (regardless of licenses) is quickly becoming a barrier to entry.

Kraken Seeks $4 Billion Valuation

As CryptoGlobe reported in December 2018, Kraken had been considering a private offering over acquisition opportunities. The American crypto trading platform’s management was thinking of selling a portion of the company’s shares to some of its most high-profile clients, with a minimum investment amount of $100,000.

In a survey sent to its top clients, Kraken had first clarified it had adequate financial resources to continue operations. However, the exchange operator noted it saw good acquisition opportunities given its “significant reserves” in a rough digital currency bear market. Notably, Kraken had been seeking a $4 billion valuation, with its email (to clients) stating:

The transaction process will be done by a 3rd party service, who will run accredited investor checks, facilitate the execution of transaction documents, and the funding of your investment.