Kraken's Jesse Powell Criticizes SEC Over Legal Action

Jesse Powell, co-founder of the cryptocurrency exchange Kraken, has publicly criticized the United States Securities and Exchange Commission (SEC) following a lawsuit against his company. The SEC has accused Kraken of several violations related to securities laws.

SEC Sues Kraken for Alleged Violations

The SEC's lawsuit, filed on November 20, alleges that Kraken did not comply with securities regulations. Specifically, the commission claims that Kraken failed to register its crypto asset staking-as-a-service program and did not follow proper procedures for separating customer and corporate funds.

Powell's Reaction to the SEC's Move

In response to the lawsuit, Powell expressed his frustration with X (previously known as Twitter). He used the term "top decel," common in tech circles to denote a hindrance to progress, to describe the SEC. Powell expressed his belief that the SEC's actions were excessive, especially after Kraken had previously agreed to a $30 million settlement in February for similar issues. He advised other crypto companies to steer clear of the United States to avoid costly legal confrontations.

Kraken's Defense and Response

A spokesperson for Kraken refuted the SEC's claims, particularly the allegation of listing unregistered securities. They described the lawsuit as disappointing and stated that Kraken is prepared to defend its actions in court. In a blog post dated November 20, Kraken addressed the SEC's accusation of commingling funds. The company argued that the regulator's claim was baseless, emphasizing that it only involved the use of fees that Kraken had rightfully earned and that no user funds were reported as missing.

Impact on the Crypto Industry

This legal battle between Kraken and the SEC underscores the ongoing tension between cryptocurrency platforms and regulatory bodies in the United States. The outcome of this case could have significant implications for how crypto exchanges operate and are regulated in the future.