Kraken hits back at New York Attorney General’s approach towards crypto businesses
Thu, 20 Sep 2018, 11:26 am UTC
This week, the OAG published a report on the results of the Virtual Markets Integrity Initiative launched in April 2018. Kraken, which was one of the 13 crypto trading platforms that received a letter from the OAG, denied responding to the request to furnish key information on their operations, internal controls, and safeguards to protect customer assets.
In the report, the OAG said that it has referred three platforms – Binance, Gate.io, and Kraken – to the New York State Department of Financial Services (NYDFS) for possibly operating unlawfully in New York.
The Attorney General’s office highlighted Kraken’s public response on the matter, calling it “alarming.” It said, “In announcing the company’s decision not to participate in the Initiative, Kraken declared that market manipulation “doesn’t matter to most crypto traders,” even while admitting that “scams are rampant” in the industry.”
It’s important to point out here that Kraken suspended its services in New York back in 2015 due to the state’s BitLicense and strict regulations. Kraken CEO Jesse Powell issued an official statement on the matter in April:
In an official response to the report, Powell said in a tweet:
Further responding to queries by other Twitter users, Kraken said it would have “sacrificed all the resources required to answer all the questions, missing other deadlines, delaying product improvements. Without knowing what the business trade-offs/opportunity cost was, it's a harsh judgement to make.”
It added, “…We don't serve NY and therefore could not possibly be operating illegally in NY. Laws in other jurisdictions will vary and it's a complex, global issue.”
Bloq co-founder Jeff Garzik and ShapeShift CEO Erik Voorhees also commented on the issue:
NYDFS was grumpy that their info summons was rejected. Result? Bad govt behavior: implying that a business might be breaking the law simply because said business did not respond voluntarily. NYDFS trolled the media, who took the bait.— Jeff Garzik (@jgarzik) September 19, 2018
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