‘Regulators let the bad guys get big’ — Kraken CEO speaks out after SEC settlement

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Jesse Powell, CEO of crypto exchange Kraken, has accused U.S. financial regulators of “bad guys” winning out to their own ends.

In a February 19 Twitter thread, Powell guessed U.S. regulators, presumably including the Securities and Exchange Commission, have allowed cryptocurrency companies to operate without coercive action as herrings on corporate targets. Allowing the “bad guys to siphon off the users, revenue, and venture capital” available to companies that are doing well could effectively destroy the industry.

“The bad guys are actually on your side,” Powell said.

Powell’s statement follows after Kraken reached an agreement with the SEC in which the crypto firm will cease offering staking services or programs to U.S. customers and pay $30 million in squatters, pre-judgment interest, and civil Agreed to pay the penalty. Many in the crypto industry have criticized the SEC’s actions as another example of “regulation by enforcement.” This extends to regulators cracking down on celebrities endorsing tokens through social media channels.

Related: SEC Chairman Issues Warning To Crypto Firms After Action Against Kraken Staking

In September 2022, Powell announced that Kraken Chief Operating Officer Dave Ripley would succeed him as CEO. Paxos was also reportedly facing enforcement action from the SEC for allegedly violating investor protection laws in handling the Binance USD (BUSD) stablecoin.