The CEO of crypto exchange Kraken, Jesse Powell, says U.S. regulators “let the bad guys get big and blow up because it serves their agenda.” The executive explained: “Bad guys operate with huge competitive advantages. They suck up users, revenue, and venture capital that would otherwise have gone to good guys.”
Kraken’s CEO Has a Theory on U.S. Crypto Regulation
The chief executive of cryptocurrency exchange Kraken, Jesse Powell, took to Twitter Sunday to express his opinion regarding crypto regulation in the United States. The executive began:
I have a theory: Regulators let the bad guys get big and blow up because it serves their agenda.
Powell proceeded to name three goals he believes regulators are trying to achieve. The first is to “destroy capital/resources in [the] crypto ecosystem,” he wrote. The second is to “burn people, [and] deter adoption,” he continued, adding that the third is to “give air cover to attack good actors.”
The Kraken boss asserted that for regulators: “The bad guys are actually on-side. Good guys are the enemy.” However, he stressed: “If the bad guys can run long enough without blowing up, they might just kill the good guys for you.” Noting that bad guys “can always be jailed later,” Powell warned:
Bad guys operate with huge competitive advantages. They suck up users, revenue and venture capital that would otherwise have gone to good guys.
In another tweet, Powell commented on how regulators often seek more funding from Congress in order to regulate the crypto sector more effectively. “Funding is the obvious scapegoat. ‘If we had a bigger budget, we could have caught it.’ The facts don’t support that but, rather than impose real consequences for failure, we reward with bigger budgets. The glory is all in disaster response, so politicians manufacture disasters,” he opined.
Earlier this month, the U.S. Securities and Exchange Commission (SEC) took action against Kraken over its staking program. The crypto exchange settled with the SEC, closed down its staking program for U.S. customers, and agreed to pay $30 million in disgorgement, prejudgment interest, and civil penalties.
Powell also recently expressed his frustration regarding how regulators ignored his warning about illegal activity in the crypto space and then slapped his exchange with enforcement action. Without specifically mentioning the collapsed crypto exchange FTX, the Kraken chief tweeted Friday:
I can’t tell you how infuriating it is to have pointed out massive red flags and obviously illegal activity to regulators only to have them ignore the issues for years. ‘They’re offshore. It’s complicated. We’re looking at everybody.’ FOR YEARS. Then to be used as their example.