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2 years ago

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Kraken co-founder Jesse Powell has lashed out at the Securities and Exchange Commission after it sued his crypto exchange for alleged securities law violations. 

In a Nov. 21 post to X (formerly Twitter), Powell called the regulator “USA’s top decel” — a term used in tech circles to insult someone who slows progress — and claimed the SEC wasn’t satisfied with the $30 million it levied from Kraken as a settlement in February.

In a follow-up post, Powell said the SEC’s message to Kraken and other crypto firms was clear and warned other crypto companies to leave “the US warzone” to avoid expensive legal battles.

“$30m buys you about 10 months before the SEC comes around to extort you again. Lawyers can do a lot with $30m but the SEC knows that a real fight will likely cost $100m+, and valuable time. If you can’t afford it, get your crypto company out of the US warzone.”

The regulator had previously charged Kraken with “failing to register the offer and sale of their crypto asset staking-as-a-service program.” As part of its settlement, Kraken agreed to pay $30 million and cease offering crypto-staking products and services to U.S. customers.

Related: Kraken will share data of 42,000 users with IRS

Powell’s incisive comments come after a Nov. 20 lawsuit from the SEC, which pinned Kraken on several securities law violations.

The SEC accused Kraken of failing to register with the agency as a securities broker and claimed it had commingled customer and corporate funds.

A Kraken spokesperson denied it listed unregistered securities and described the lawsuit as “disappointing” and would defend its position in court.

In a follow-up Nov. 20 blog post, Kraken said the SEC’s commingling accusations were “no more than Kraken spending fees it has already earned,” and the regulator doesn’t allege any user funds are missing.

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