> The SEC alleges that Kraken intertwines the traditional services of an exchange, broker, dealer, and clearing agency without having registered any of those functions with the Commission as required by law.
SEC charges Kraken for operating as an unregistered securities exchange
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Re: SEC charges Kraken for operating as an unregistered securities exchange
#22Oh, great. Right when we’re on the verge of receiving our Mt Gox payouts. Ah well, I knew it was too good to be true. The way not to be disappointed is to not get your hopes up involving money.
Why can’t the Bitcoin payouts be made directly to Bitcoin wallets? Did no one learn from Mt Gox?
Re: SEC charges Kraken for operating as an unregistered securities exchange
#23Earlier quoted context omitted.
I'm guessing there was some moving of the goal posts at play here, by the feds, because the SEC does a huge background check on the operations of your company before you're allowed to be publicly traded, and if they didn't find anything there, I have a hard time believing they were breaking rules as the rules were written at the time.
Checking details of company registration is not the same as a background checK. Let me explain the difference.. I had a series 63 license from The SEC. Here is what I submitted: 1. Background info form to FBI which was checked. 2. Fingerprint form Far different when you register a company as public. Per their own docs they review accounting not background, see https://www.sec.gov/divisions/corpfin/cffilingreview
This does not seem to me to be strictly true, at least operating in the space of payments industries. They go very deep into technical details as far as justifying a company's value. Such that in an open source company that I work for, we had to provide metrics as deep as like popularity and contributor-base growth in the open source ecosystem over time. That does not seem like an accounting review, that seems more background. I have a hard time believing that the SEC would not find a detail like whether or not the exchange was even legally operating in the findings of a review of the company's background.
Of course, this was my first time aiding in the effort for taking a company public, so I'm not exactly a well seasoned veteran and there is a lot that I do not know. But based on what we had to provide to the SEC, I do not believe that it is strictly true that the road to publicly traded is only gated by an accounting review.
Re: SEC charges Kraken for operating as an unregistered securities exchange
#24> The SEC alleges that Kraken intertwines the traditional services of an exchange, broker, dealer, and clearing agency without having registered any of those functions with the Commission as required by law.
I find following more troubling:
> As alleged in the complaint, Kraken commingles its customers’ money with its own, including paying operational expenses directly from accounts that hold customer cash.
Didn't FTX/SBF do same?
Re: SEC charges Kraken for operating as an unregistered securities exchange
#25Kraken has recruited a significant number of Rust developers, or at least individuals keen on learning Rust, over the past few years. This presents a good opportunity for other companies that adhere to legal standards to consider hiring these developers.
In 2020, I received an interview invitation from Kraken and subsequently received invitations five times in 2022. The engineering managers I conversed with took pride in having one of the largest Rust development teams in the tech industry, in addition to a substantial number of Go developers. Due to my professional experience with both languages, they expressed considerable interest in bringing me on board. However, I faced rejection twice after accepting two of their invitations in 2022. The first time was due to my preference for utilizing basic yet stable features in Rust, as opposed to the alpha features anticipated by their interviewers. The second rejection occurred because I did not exhibit sufficient interest in their crypto business. While this aligns with their business focus, it seemed like a convenient excuse, given that I had consistently communicated my limited interest in the product, and both the technology and hiring manager appeared to be accepting of that fact.
I mean, I don't necessarily align with Apple's mission, but I still got the job there.
Re: SEC charges Kraken for operating as an unregistered securities exchange
#26(I realize kraken is not a publicly traded company, but...) I want a reverse ETF of companies that sponsor Formula 1 teams, as they seem to attract lots of bottom feeders.
Re: SEC charges Kraken for operating as an unregistered securities exchange
#27Oh, great. Right when we’re on the verge of receiving our Mt Gox payouts. Ah well, I knew it was too good to be true. The way not to be disappointed is to not get your hopes up involving money.
Why can’t the Bitcoin payouts be made directly to Bitcoin wallets? Did no one learn from Mt Gox?
Well, Kraken was the conduit through which payments were going to be made. Japan is … fastidious … to the law. I think they wanted to deal with an actual entity.
Hopefully this legal albatross won’t spook them.
Re: SEC charges Kraken for operating as an unregistered securities exchange
#28> The SEC alleges that Kraken intertwines the traditional services of an exchange, broker, dealer, and clearing agency without having registered any of those functions with the Commission as required by law.
I find following more troubling: > As alleged in the complaint, Kraken commingles its customers’ money with its own, including paying operational expenses directly from accounts that hold customer cash. Didn't FTX/SBF do same?
Is that inherently problematic, as long as they're accounting properly?
Re: SEC charges Kraken for operating as an unregistered securities exchange
#29> The SEC alleges that Kraken intertwines the traditional services of an exchange, broker, dealer, and clearing agency without having registered any of those functions with the Commission as required by law.
I find following more troubling: > As alleged in the complaint, Kraken commingles its customers’ money with its own, including paying operational expenses directly from accounts that hold customer cash. Didn't FTX/SBF do same?
I would be more surprised by a crypto exchange that doesn't. Except for maybe Coinbase, none of these places take compliance seriously.
Re: SEC charges Kraken for operating as an unregistered securities exchange
#30> The SEC alleges that Kraken intertwines the traditional services of an exchange, broker, dealer, and clearing agency without having registered any of those functions with the Commission as required by law.
I find following more troubling: > As alleged in the complaint, Kraken commingles its customers’ money with its own, including paying operational expenses directly from accounts that hold customer cash. Didn't FTX/SBF do same?
What's interesting this time around is Kraken has fully bought into audits and cryptographic proof of reserves (complete with sample Python code to verify your account balance is included in the proof tree).
https://www.kraken.com/proof-of-reserves
https://proof-of-reserves.trustexplorer.io/clients/kraken
If there's any crypto company out there that "gets it" and is doing things right, it's them. The SEC is going after the big one this time. I can't wait to see how it shakes out.