Kraken co-founder Jesse Powell has welcomed the result of the Binance investigation in an X (formerly Twitter) post and has highlighted the need for long-term-oriented visionaries and shareholders.
Over the last 12 months, leaders of major crypto exchanges, such as FTX and Binance, have come under federal scrutiny by United States government agencies for allegations ranging from misappropriation of investors’ funds to bypassing Anti-Money Laundering (AML) regulations.
According to Powell, the probes provide much-needed answers to How are they going so fast? and How are they getting away with it?
Powell sees Binance and former CEO Changpeng “CZ” Zhao’s legal proceedings as a positive move, as “going after the most egregious offenders offshore would require effort.” He stated that U.S.-based crypto businesses such as “Kraken, Coinbase and Ripple are all easy targets, sitting right in their back yard.”
The game feels a bit more fair today. The last 12 months have answered 2 nagging questions from shareholders:
1. How are they going so fast? 2. How are they getting away with it?
“Trust me, any day now…” is only believable for so many years. It’s hard to keep faith while…
Hinting at CZ’s recent admission that Binance violated AML requirements, Powell stressed the need to self-police to improve the industry’s reputation:
“Each dodgy operation represents an opportunity for governments to scapegoat crypto and tighten the noose.”
He further asked the community to cooperate to restore the image of the crypto ecosystem by recommending reliable services that “are playing the long game.” He also supported the idea of the Know Your Customer (KYC) requirement as long as it helps legally onboard new users to crypto.
Despite Kraken’s long-term approach, the U.S. Securities and Exchange Commission sued Kraken on Nov. 20 for allegedly commingling customer funds and failing to register with the regulator as a securities exchange, broker, dealer and clearing agency.
The lawsuit claims that crypto assets are securities contracts under U.S. law.
“Without registering with the SEC in any capacity, Kraken has simultaneously acted as a broker, dealer, exchange, and clearing agency with respect to these crypto asset securities.”
A Kraken spokesperson told Cointelegraph it disagrees with the SEC’s complaint and plans to defend itself in court. “It is disappointing to see the SEC continue down its path of regulation by enforcement, which harms American consumers, stunts innovation and damages U.S. competitiveness globally,” the spokesperson added.
Sir Ed Davey has branded Elon Musk a criminal and called for him to be prosecuted for “allowing online harm to children” on his social media platform X.
The Lib Dem leader told Sky News’ Sunday Morning with Trevor Phillips the billionaire owner of X, formerly Twitter, is “inciting violence” and his social media platform is actively failing to protect children.
Sir Ed, speaking from the Lib Dem conference in Bournemouth, said Mr Musk could be prosecuted under the Online Safety Act, under which social media companies have a legal duty to protect children from harmful content and their directors are liable for criminal prosecution for breaching it.
Image: Elon Musk. Pic: Reuters
Asked if he is calling Mr Musk a criminal, Sir Ed did not miss a beat as he said: “Yes.
“Not just because of the awful things he’s done in inciting violence, and, for example, he says a civil war in our country is inevitable, that our democratically elected government should be overthrown.
“They were bad enough. But on his platform, they’re examples of adverse, pushing people on self-harm, on grooming, even selling videos showing paedophile acts, of child sex abuse acts and I think he should be held to account for them, him personally and his business.
“Ofcom now has the powers under the Online Safety Act.”
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He said if Mr Musk comes to the UK, he should be arrested.
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0:38
Sir Ed Davey enters conference with marching band
Mr Musk was accused of inciting violence during a march organised by Tommy Robinson in London last week.
He told the protest via video link: “This is a message to the reasonable centre, the people who ordinarily wouldn’t get involved in politics, who just want to live their lives. They don’t want that, they’re quiet, they just go about their business.
“My message is to them: if this continues, that violence is going to come to you, you will have no choice. You’re in a fundamental situation here.
“Whether you choose violence or not, violence is coming to you. You either fight back or you die, that’s the truth, I think.”
Image: Sir Ed Davey said Elon Musk should be arrested
Sir Ed said it is “shocking” that Mr Musk removed some of X’s child safety teams when he took over Twitter in 2022 and accused him of just being “interested in his bank account”.
“I’m interested in the safety of our children, and it is quite wrong that his business puts on these adverts,” said the Lib Dem leader.
“It’s disgusting and I hope everybody will agree with me and the Liberal Democrats that we should take really strong action against him.”
After Mr Musk acquired Twitter, many of its child safety staff were laid off or resigned, and the platform’s trust and safety council was disbanded.
Child protection experts have accused Mr Musk of leading a “race to the bottom on safety”.
Image: Elon Musk with Donald Trump in the Oval Office. Pic: AP
Ofcom, the UK’s independent media regulator, which has the power to prosecute directors of social media platforms under the Online Safety Act, has launched an investigation into X’s handling of child sexual abuse content.
This is not the first time Sir Ed has hit out at the world’s richest man, as he called for the US ambassador to be summoned in February “to ask why an incoming US official is suggesting the UK government should be overthrown”.
The prime minister had called on Benjamin Netanyahu’s government to take substantive steps to end the “appalling situation in Gaza“, agree to a ceasefire, commit to a long-term sustainable peace, allow the UN to restart the supply of aid, and not annex the West Bank.
The Israeli foreign ministry furiously rejected his statement, with Mr Netanyahu claiming that “Starmer rewards Hamas‘s monstrous terrorism and punishes its victims”.
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Could recognition of Palestine change the West Bank?
Ilay David, brother of Hamas hostage Evyatar David, who was seen emaciated in a video last month, said giving recognition was “like saying to Hamas: ‘It is OK, you can keep starving the hostages, you can keep using them as human shields.’
“This kind of recognition gives Hamas power to be stubborn in negotiations. That is the last thing we need right now.”
There has been no ceasefire, and the situation in Gaza has deteriorated, with a declaration of a famine in Gaza City and the expansion of Israeli military operations.
Israel has launched a major ground offensive to seize all of Gaza City and destroy Hamas in an operation which has prompted widespread condemnation, with UK Foreign Secretary Yvette Cooper calling it “utterly reckless and appalling”.
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15:16
What changed in UK’s Gaza policy?
Earlier this month, a UN commission of inquiry concluded that Israel has committed genocide against Palestinians in Gaza. Israel said the claim was “distorted and false”.
The UK will join 147 of the 193 members of the UN who recognise Palestine ahead of the UN General Assembly in New York on Monday.
Other nations, including France, Australia and Canada, have said they plan to take the same step at the UN gathering as part of a broad international effort to put pressure on Israel.
And the Muslim Council of Britain welcomed the prime minister’s move, but urged that recognition must also come with “tangible action”.
During a joint news conference with the prime minister at Chequers on Thursday, Donald Trump said he disagreed with recognition, and US politicians have urged the UK and other allies to reverse their stance.
Image: Sir Keir Starmer is expected to formally announce the move on Sunday. Pic: PA
Sky News understands that Israel is considering options in response to the UK’s decision, but the strength of that reaction is still under consideration.
Family members of some of the 48 hostages still in captivity, after Hamas and other militant groups stormed into Israel on 7 October 2023, have written an open letter to Sir Keir, condemning the move.
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2:38
Israel ramps up attacks on Gaza City
“Hamas has already celebrated the UK’s decision as a victory and reneged on a ceasefire deal,” they said.
“We write to you with a simple plea – do not take this step until our loved ones are home and in our arms.”
Meanwhile shadow foreign secretary Dame Priti Patel accused the prime minister of “capitulating” to his backbenchers to shore up his leadership.
“With the terrorist organisation Hamas still holding hostages in barbaric conditions and glorifying acts of terror, Starmer is sending a dangerous message, where violence and extremism are tolerated and rewarded,” she said.
The UK government is understood to be looking at further sanctions on Hamas, and has demanded the group release all hostages, agree to an immediate ceasefire, accept it will have no role in governing Gaza, and commit to disarmament.