Kraken co-founder, Jesse Powell, has strongly criticized the United States Securities and Exchange Commission (SEC) in response to the recent lawsuit filed against his crypto exchange for alleged securities law violations.
Powell took to social media, specifically X (formerly Twitter), on November 21 to express his discontent with the SEC’s actions.
In a scathing post, Powell referred to the SEC as the “USA’s top decel,” a term used in the tech industry to disparage someone seen as hindering progress.
He also claimed that the SEC was not satisfied with the $30 million settlement that Kraken had agreed to pay in February.
This settlement had been reached in response to previous charges by the SEC, which accused Kraken of failing to register the offer and sale of their crypto asset staking-as-a-service program.
As part of the agreement, Kraken had agreed to pay the $30 million fine and cease offering crypto-staking products and services to U.S. customers.
In a subsequent post, Powell issued a warning to other crypto companies, advising them to avoid the “US warzone” to steer clear of costly legal battles.
He asserted that the $30 million payment would only buy them about ten months of respite before the SEC returned to demand more.
Powell argued that the SEC was well aware that a genuine legal battle could cost well over $100 million and valuable time.
The SEC’s latest lawsuit, filed on November 20, accused Kraken of multiple securities law violations, including the failure to register as a securities broker and the alleged commingling of customer and corporate funds.
Kraken’s response was swift, with a spokesperson denying the listing of unregistered securities and describing the lawsuit as “disappointing.”
The exchange vowed to defend its position in court, asserting that the commingling accusations were merely the result of Kraken spending fees it had already earned.
Importantly, the SEC did not allege that any user funds were missing.
Jesse Powell’s vocal criticism of the SEC underscores the ongoing tension between crypto companies and regulatory authorities in the United States.
As the crypto industry continues to evolve, it faces increasing scrutiny and legal challenges, prompting some companies to reconsider their operations within the country.