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.
The return on Donald Trump to the G7 was always going to be unpredictable. That it is happening against the backdrop of an escalating conflict in the Middle East makes it even more so.
Expectations had already been low, with the Canadian hosts cautioning against the normal joint communique at the end of the summit, mindful that this group of leaders would struggle to find consensus.
Canadian Prime Minister Mark Carney carefully laid down an agenda that was uncontroversial in a bid to avoid any blow-ups between President Trump and allies, who of late have been divided like never before – be it over tariffs and trade, Russia and Ukraine, or, more recently Israel’s conduct in Gaza.
But discussions around critical minerals and global supply chains will undoubtedly drop down the agenda as leaders convene at a precarious moment. Keir Starmer, on his way over to Canada for a bi-lateral meeting in Ottawa with PM Carney before travelling onto the G7 summit in Kananaskis, underscored the gravity of the situation as he again spoke of de-escalation, while also confirmed that the UK was deploying more British fighter jets to the region amid threats from Tehran that it will attack UK bases if London helps defend Israel against airstrikes.
Image: Canadian PM Mark Carney is greeted by President Donald Trump at the White House in May. Pic: AP
Really this is a G7 agenda scrambled as world leaders scramble to de-escalate the worst fighting between Tel Aviv and Tehran in decades. President Trump has for months been urging Israel not to strike Iran as he worked towards a diplomatic deal to halt uranium enrichment. Further talks had been due on Sunday – but are now not expected to go ahead.
All eyes will be on Trump in the coming days, to see if the US – Israel’s closest ally – will call on Israel to rein in its assault. The US has so far not participated in any joint attacks with Tel Aviv, but is moving warships and other military assets to the Middle East.
Sir Keir, who has managed to strike the first trade deal with Trump, will want to leverage his “good relationship” with the US leader at the G7 to press for de-escalation in the Middle East, while he also hopes to use the summit to further discuss the further the interests of Ukraine with Trump and raise again the prospects of Russian sanctions.
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“We’ve got President Zelenskyy coming so that provides a good opportunity for us to discuss again as a group,” the PM told me on the flight over to Canada. “My long-standing view is, we need to get Russia to the table for an unconditional ceasefire. That’s not been really straightforward. But we do need to be clear about what we need to get to the table and that if that doesn’t happen, sanctions will undoubtedly be part of the discussion at the G7.”
Image: Prime Minister Sir Keir Starmer (R) is greeted by Mark Carney as he arrives in Ottawa ahead of the G7
But that the leaders are not planning for a joint communique – a document outlining what the leaders have agreed – tells you a lot. When they last gathered with Trump in Canada for the G7 back in 2018, the US president rather spectacularly fell out with Justin Trudeau when the former Canadian president threatened to retaliate against US tariffs and refused to sign the G7 agreement.
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Since then, Trump has spoken of his desire to turn Canada into the 51st state of the US, a suggestion that helped catapult the Liberal Party beyond their Conservative rivals and back into power in the recent Canadian elections, as Mark Carney stood on a ticket of confronting Trump’s aggression.
With so much disagreement between the US and allies, it is hard to see where progress might be made over the next couple of days. But what these leaders will agree on is the need to take down the temperature in the Middle East and for all the unpredictability around these relationships, what is certain is a sense of urgency around Iran and Israel that could find these increasingly disparate allies on common ground.
Unless Bitcoin upgrades its core cryptography in the next five years, the trust it has built over 16 years could be wiped out by a single quantum attack. Urgent upgrades are needed to protect the world’s leading cryptocurrency.