Cryptocurrency: Regulators Let the ‘Bad Guys Get Big’ — Kraken’s Jesse Powell

Lavina Daryanani
Source: StormGain

The U.S. Securities and Exchange Commission has stepped up its regulatory game as of late. By making “unregistered securities” its main hammer, the agency has targeted several firms from cryptocurrency space. In January, the SEC charged Genesis and Gemini for the unregistered offer and sale of securities to retail investors via the Gemini Earn crypto asset lending program.

After that, cryptocurrency exchange Kraken was under the radar. To settle the charges, it retrospectively agreed to discontinue its unregistered offering and sale of cryptocurrency asset staking-as-a-service program to users. It additionally paid $30 million to the agency.

Recently, Kraken Co-founder and CEO Jesse Powell tweeted that it’s “infuriating” to have pointed out “massive red flags” and “illegal activity” to regulators, only to have them ignore the issues for years.

Further elaborating on his theory, he tweeted today:

“Regulators let the bad guys get big and blow up because it serves their agenda: 1. destroy capital/resources in crypto ecosystem 2. burn people, deter adoption 3. give air cover to attack good actors.”

He added that the good guys are essentially the enemy and further said,

“If the bad guys can run long enough without blowing up, they might just kill the good guys for you. Bad guys operate with huge competitive advantages. They suck up users, revenue and venture capital that would otherwise have gone to good guys. BG can always be jailed later.”

Prior to this, the Kraken executive termed labelled the regulatory action as “Operation Chokepoint 2.0” and asserted that it was in full effect. He opined that it is no coincidence that every financial regulator in the U.S. is attacking “mundane, respectable, domestic crypto businesses.” He further exclaimed,

“There is no interest in supervising crypto. Everything being done is to shut it down.”

Other community reactions

Last week, an SEC panel voted 4-1 in favor of a proposal to make more difficult for cryptocurrency firms to serve as digital asset custodians in the future. Opining on the same, a prominent XRP Army member said that the SEC is being “ruthless” about expanding its powers.

Also Read: Hong Kong’s SFC Looking To Allow Bitcoin, Ethereum Retail Trading

Parallelly, attorney John Deaton recently brought to light another “stupidly outrageous” claim of the SEC today. He pointed out that the per the agency, XRP sold in Japan is a security, even though the Japanese regulator has said that it is not.

Also Read: ‘Fireworks’ Time: Solana Gearing for a 40% Rally

Alongside, others have been pointing out how the SEC has been “single-handedly” destroying the ability for Americans to buy cryptocurrency. In fact, they believe that the situation will only get worse going forward.

Another well-known analyst from the space, Zack Voell, recently shed light on how the SEC is losing all its credibility. Elaborating on the same, he tweeted: