Kraken CEO Refuses to Comply with New York Attorney General’s New Enquiry
Cryptocurrency exchange Kraken has said that it won’t comply with the New York Attorney General’s request for information.
The San Francisco-based exchange was one of 13 cryptocurrency exchanges that received a letter from New York Attorney General Eric Schneiderman on Tuesday as part of his new enquiry into the exchanges. These included Coinbase's GDAX, Gemini, bitFlyer USA, Bitfinex, Bitstamp USA, Kraken, Bittrex, Poloniex, Binance, Tidex.com, Gate.io, itBit and Huobi.Pro
Schneiderman’s office sent letters to the exchanges as well as a questionnaire looking into the companies ownership and control, basic operation and fees, trading policies and procedures, outages and other suspension types, internal controls, privacy and money laundering, protection against risk to customer funds, and written materials. They have until the 1st May to complete them.
Yet, while some, such as Gemini CEO Tyler Winklevoss have ‘applauded’ the enquiry from the Attorney General, Kraken have taken a different approach.
Posting a statement on Twitter, Jesse Powell, Kraken CEO, said that ‘the resource diversion for this production is massive. This is going to completely blow up our roadmap,’ adding:
“Then I realised we made the wise decision to get the hell out of New York three years ago and that we can dodge this bullet. Ordinarily, we’re happy to help government understand our business, however, this is not the way to go about it.”
In 2015, Kraken announced that it would be leaving New York due to its BitLicense, the state’s digital currency regulatory framework. In a blog post at the time, the company said that the ‘[BitLicense] is a creature so foul, so cruel that not even Kraken possesses the courage or strength to face its nasty, big, pointy teeth.’
According to Kraken’s statement regarding the Attorney General’s enquiry, the last time the exchange complied with New York’s request for information they were impeded with the BitLicense. The statement added ‘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.’
In other news regarding Kraken the exchange revealed earlier this week that it is to halt trading services in Japan by June, citing rising costs for its decision. According to a report from Bloomberg Kraken may re-enter the Japanese market at some point in the future.
In a statement, Kraken wrote:
“Suspending services for Japan residents will allow us to better focus on our resources to improve in other geographical areas. This is a localised suspension of service that only affects residents of Japan and does not impact services for Japanese citizens or businesses domiciled outside of Japan.”