Former Employee Sues Crypto Exchange Kraken Over $900,000 Payment

Francisco Memoria

Jonathan Silverman, a former Kraken employee hired in April of 2017, is reportedly suing the cryptocurrency exchange, as it allegedly failed to pay him for work he for it. The lawsuit demands compensation of over $900,000.

According to Bloomberg, Silverman managed Kraken’s institutional sales and trading desk in New York, and reportedly reached an agreement with the exhcnage’ s CEO, Jesse Powell, to be paid $150,000 in salary. It also involved an oral agreement, in which Powell allegedly agreed to pay him 10% of the desk’s annual profit.

Silverman alleges the trading desk made over $19 million in profit in three months back in 2017, and that he hasn’t received the 10% commission, or any additional promised stock options.

Christina Vee, a spokeswoman for Kraken, was quoted as saying:

[Silverman] is both lying and in breach of his confidentiality agreement.

Back in 2015, Kraken announced through a blog post it was discontinuing its services in the state of New York, over the state’s controversial BitLicense, which was introduced by the Department of Financial Services.

Silverman’s lawsuit, Bloomberg adds, challenges Kraken did leave New York, as it claims the exchange is “misrepresenting to the public and government regulators that it was not operating in New York.”

In reality, it claims, Kraken’s over-the-counter (OTC) trading occurred “almost exclusively in New York.” Powell is notably known for being outspoken regarding the BitLicense and New York regulators’ approach to the crypto space.

Last year, when the New York Attorney General launched an inquiry into cryptocurrency exchanges under the pretense of protecting consumers, citing scams and other security problems. At the time, Kraken fired back.

In an emailed statement to Bloomberg David Silver, one of the attorneys representing Silverman, stated that “because some people in the cryptocurrency space don’t believe the rules apply to them doesn’t mean that’s the way things actually work.”

The news outlet adds that when Silverman left Kraken, he reached an agreement with the firm that would see him received a $907,000 settlement, which the lawsuit alleged Kraken “refused” to pay out.