Jesse Powell, co-founder of Kraken, a leading cryptocurrency exchange, has voiced concerns about new challenges facing the reputation of the crypto industry. This comes in the wake of Binance founder Changpeng Zhao’s resignation.
Powell, who stepped down as Kraken’s CEO in April, explained that the industry is currently navigating a difficult environment in the United States, with regulators scrutinizing crypto companies through legal actions and penalties.
New threats to the industry’s reputation continue to emerge. Each dodgy operation represents an opportunity for governments to scapegoat crypto and tighten the noose, said Powell.
Binance Founder Steps Down Amid Regulatory Pressure
On November 22, 2023, Zhao, also known as CZ, made an announcement. He decided to step down as Binance’s CEO. This decision came after Binance agreed to pay a record $4.3 billion fine to the Commodity Futures Trading Commission (CFTC). The CFTC accused Binance of operating illegally in the US.
They said Binance offered derivatives and futures contracts to US customers without proper registration and compliance controls. While Zhao will remain as Binance’s founder and board member, he will no longer be the CEO. An unnamed successor will take over the CEO role.
Binance, founded in 2017, holds the title of being the world’s biggest cryptocurrency exchange when it comes to trading volume. However, it has encountered growing regulatory scrutiny in various countries, such as the UK, Japan, Germany, and Singapore.
Zhao expressed his desire for his resignation to assist Binance in successfully adapting to the constantly evolving regulatory landscape and establishing trust with regulators and governments.
Kraken Co-Founder Slams SEC For “Extortion”
Kraken, founded by Powell in 2011, expressed his frustration with US regulators, particularly the Securities and Exchange Commission (SEC). This year, the SEC sued Kraken, accusing them of offering unregistered securities and mixing customer funds.
Powell referred to the SEC as the “USA’s top decelerant,” an insult aimed at those who hinder progress. Additionally, he accused the SEC of extorting money from cryptocurrency companies.
Kraken CEO Jesse Powell disclosed that in February, he reached a settlement of $30 million with the Securities and Exchange Commission (SEC). However, in November, the SEC filed another lawsuit against Kraken, claiming the company had not registered as a securities broker.
Powell criticized the SEC’s approach, stating they were searching for different regulatory standards in California. Powell advised other cryptocurrency companies to consider moving to jurisdictions that are more supportive of the crypto industry.
Crypto Industry Faces New Threats To Reputation
Federal Reserve Chair Powell highlighted concerns about the reputation of the crypto industry. He warned that regulators and governments were using questionable transactions as an excuse to blame and regulate cryptocurrencies.
Powell acknowledged the industry’s efforts to enhance transparency and self-regulation but acknowledged that there are still individuals engaging in malicious activities that harm its image.
In his statement, Powell contradicted the belief held by certain officials like Janet Yellen that the crypto industry serves solely illicit purposes. According to Powell, it also fosters innovation and promotes financial inclusion.
In fact, Powell went as far as to call the crypto industry “the future of money” and urged regulators to establish transparent and fair regulations for its growth and advancement.
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