New York’s attorney General Eric Schneiderman announced a “Virtual Markets Integrity Initiative” on Tuesday that involves inquiry of crypto exchanges regarding their policies and practices. 13 exchanges were sent letters seeking information about their operations, tech and other major details.
Schneiderman has to complete a questionnaire till May 1st to gather crypto details like trading, ownership, fees, money laundering etc.
One of the 13 exchanges that received the letter was the San Francisco based Kraken. Unlike other crypto exchanges, Kraken blatantly declined to comply with the New York attorney general’s inquiry.
Somebody has to say what everybody’s actually thinking about the NYAG’s inquiry. The placative kowtowing toward this kind of abuse sends the message that it’s ok. It’s not ok. It’s insulting. https://t.co/sta9VuXPK1 pic.twitter.com/4Jg66bia1I
— Jesse Powell (@jespow) 18 April 2018
“The resource diversion for this production is massive. This is going to completely blow up our roadmap!” said Kraken co-founder and CEO Jesse Powell on Twitter, Wednesday.
“Then I realized we made the wise decision to get the hell out of New York three years ago and that we can dodge this bullet,” Powell said. “Ordinarily, we’re happy to help government understand our business, however, this is not the way to go about it.”
Kraken, along with several other cryptocurrency exchanges do not operate in New York as operating in the city requires a “BitLicense from the New York State Department of Financial Services. Major firms like Coinbase, Ripple, bitFlyer USA and Circle are registered under the financial services department while iBit and Gemini Trust have charters.
The spokesperson for New York Attorney General said that the information requested from the exchanges is nothing too much and these financial companies owe these details to their investors.
“Legitimate entities generally like to demonstrate to their investors that their money will be protected.
“This is very basic information that any credible platform should have on hand and be willing to share with their investors.”
Kraken is the first and likely the only exchange to oppose the inquiry whereas other exchanges like Coinbase, Gemini Trust, bitFlyer have showed support.
In his statement, Powell said that if the attorney office wants to talk on the matter, “ask us for a phone call, fly yourself out to San Francisco, invite us for lunch at your office. We can tell you which industry groups to join and where to begin your research.”
Powell further said that the last time exchanges supported the request for information, they were made to get the BitLicense.
“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,” he said.
According to CoinMarketCap Kraken is the 12th largest cryptocurrency exchange on the basis of trading volume in 24 hours while CryptoCompare listed Kraken on the 5th spot by market share for U.S dollar-bitcoin trading.