Kraken has been trading crypto coins since 2011. Why did it take the SEC so long to bring this suit?
They created a new enforcement division and doubled the number of positions working on crypto enforcement last year.
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
#42Uhh, what? I've always considered Kraken to be the most rules-abiding exchange - more so than Coinbase. They're quite shrewd in what they're willing to list. I wonder if SEC is charging Coinbase soon, too?
I mean, Kraken is not a registered securities exchange. They offer many cryptocurrencies. The SEC has indicated that it considers most, probably all, cryptocurrencies to a be securities. The writing has been on the wall for a while -- Coinbase got a Wells letter, basically a "lawsuit is coming" warning, months ago.
Well, Gary Gensler is on record in 2023 saying Bitcoin is not a security. So, I don't think it's accurate to say "probably all." In previous years Ethereum had also been described as not a security, but that opinion seems to have shifted with time.
It's still not super clear to me why he says Bitcoin is not a security, but that Ethereum would be a security. I'm fine with whatever ruling as long as I can understand how it's being applied. I feel pretty good about considering stable coins securities. I'm less certain about NFTs since there is receipt of a (semi)tangible product.
I wonder if the recent introduction of ordinals to Bitcoin will result in his opinion on BTC shifting soon, too?
Re: SEC charges Kraken for operating as an unregistered securities exchange
#43Earlier quoted context omitted.
> This sentence is so weird for me. Why would you want to work for a company if you seemingly don’t care about their product. For money, of course. A company’s mission doesn’t pay for my groceries or rent. A substantial compensation package serves as a strong incentive to perform well. > And conversely, why would anyone ever hire someone for a role if the person looking to get hired doesn’t care about the product? Th…
Please take this as constructive criticism: telling an interviewer you’re not interested in the product and you only care about collecting a paycheck comes across as arrogant and is a huge red flag. Ultimately, people hire people they want to work with. You might be in the top 0.1% rust programmers, and I would still not hire you because of that attitude.
I think there’s a wide range here: we’re talking about banking so I think a position that it’s not otherwise exciting or that you’re excited by the technology and scale is not going to be seen as “your product sucks” and shouldn’t count against you. Now, it might mean you shouldn’t be doing UX for it but there’s a ton of work where you just need to work well with the people designing the user side & understand how people use it, not be leading the concept.
Re: SEC charges Kraken for operating as an unregistered securities exchange
#44Uhh, what? I've always considered Kraken to be the most rules-abiding exchange - more so than Coinbase. They're quite shrewd in what they're willing to list. I wonder if SEC is charging Coinbase soon, too?
I mean, Kraken is not a registered securities exchange. They offer many cryptocurrencies. The SEC has indicated that it considers most, probably all, cryptocurrencies to a be securities. The writing has been on the wall for a while -- Coinbase got a Wells letter, basically a "lawsuit is coming" warning, months ago.
This logic is why the SEC is losing in court
The SEC’s first strategy was to go after the companies creating the crypto. Most that are targeted settled and exchanges delisted those crypto assets that were ruled to be securities - registered or not - then the SEC went after well funded, more professional and less risk averse ones and have been losing in court.
So this is a war of attrition so the SEC then just went with blanket statements and goes after the exchanges, without telling them which ones are securities. The SEC also has not been winning at this second strategy.
All anybody has been asking is for the SEC to tell them the difference between the assets. How can a crypto asset be issued compliantly as only a product, and when does it transition into not being a security if so?
The SEC has fumbled over its words as if trained on 10 years of HN crypto comments, and the courts say its arbitrary and capracious.
Re: SEC charges Kraken for operating as an unregistered securities exchange
#45Uhh, what? I've always considered Kraken to be the most rules-abiding exchange - more so than Coinbase. They're quite shrewd in what they're willing to list. I wonder if SEC is charging Coinbase soon, too?
I mean, Kraken is not a registered securities exchange. They offer many cryptocurrencies. The SEC has indicated that it considers most, probably all, cryptocurrencies to a be securities. The writing has been on the wall for a while -- Coinbase got a Wells letter, basically a "lawsuit is coming" warning, months ago.
The SEC may think that but so far they haven't done well proving it in court.
Re: SEC charges Kraken for operating as an unregistered securities exchange
#46Earlier quoted context omitted.
I mean, Kraken is not a registered securities exchange. They offer many cryptocurrencies. The SEC has indicated that it considers most, probably all, cryptocurrencies to a be securities. The writing has been on the wall for a while -- Coinbase got a Wells letter, basically a "lawsuit is coming" warning, months ago.
Well, Gary Gensler is on record in 2023 saying Bitcoin is not a security. So, I don't think it's accurate to say "probably all." In previous years Ethereum had also been described as not a security, but that opinion seems to have shifted with time. It's still not super clear to me why he says Bitcoin is not a security, but that Ethereum would be a security. I'm fine with whatever ruling as long as I can understand ho…
Bottom line is that the founder/owner of Ethereum has said very clearly that investing in ETH is investing in the Ethereum team. Bitcoin Cash has no such "team" you invest in when buying BCH. I think thats the difference.
Re: SEC charges Kraken for operating as an unregistered securities exchange
#47Earlier quoted context omitted.
I mean, Kraken is not a registered securities exchange. They offer many cryptocurrencies. The SEC has indicated that it considers most, probably all, cryptocurrencies to a be securities. The writing has been on the wall for a while -- Coinbase got a Wells letter, basically a "lawsuit is coming" warning, months ago.
This logic is why the SEC is losing in court The SEC’s first strategy was to go after the companies creating the crypto. Most that are targeted settled and exchanges delisted those crypto assets that were ruled to be securities - registered or not - then the SEC went after well funded, more professional and less risk averse ones and have been losing in court. So this is a war of attrition so the SEC then just went wi…
It’s because laws set out what are securities. A distributed ledger of cryptographic tokens is by definition not a security.
So the SEC just claiming they are isn’t going to win any court. Their goal is really to drain funds and get companies to settle. Because the SEC isn’t supposed to determine what is a security
Re: SEC charges Kraken for operating as an unregistered securities exchange
#48> 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?
Kraken addressed this point in their blog post replying to these allegations. They're not doing this at all.
Re: SEC charges Kraken for operating as an unregistered securities exchange
#49Earlier quoted context omitted.
I mean, Kraken is not a registered securities exchange. They offer many cryptocurrencies. The SEC has indicated that it considers most, probably all, cryptocurrencies to a be securities. The writing has been on the wall for a while -- Coinbase got a Wells letter, basically a "lawsuit is coming" warning, months ago.
Well, Gary Gensler is on record in 2023 saying Bitcoin is not a security. So, I don't think it's accurate to say "probably all." In previous years Ethereum had also been described as not a security, but that opinion seems to have shifted with time. It's still not super clear to me why he says Bitcoin is not a security, but that Ethereum would be a security. I'm fine with whatever ruling as long as I can understand ho…
Also Ethereum switched to proof of stake. Which means that the "stakeholders" (shareholders) are voting what transactions go into the ledger. Bitcoin is proof of work still.
Re: SEC charges Kraken for operating as an unregistered securities exchange
#50Earlier quoted context omitted.
> This presents a good opportunity for other companies that adhere to legal standards to consider hiring these developers. Kraken is my favorite exchange. They appear to put a lot of effort into abiding by local regulations in all countries they operate. > I had consistently communicated my limited interest in the product, and both the technology and hiring manager appeared to be accepting of that fact This sentence…
> They appear to put a lot of effort into abiding by local regulations in all countries they operate. Aside from registering as a securities exchange/broker/dealer in the U.S., which the SEC clearly believes they are.
The only registered cryptocurrency exchange is Prometheus, and it doesn’t have any trading activity. There haven’t been any rules published by the sec regarding cryptocurrencies or crypto exchanges. Since cryptocurrencies aren’t investment contracts, it’s not possible to comply.