Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

SEC charges Kraken for operating as an unregistered securities exchange

sec.gov

Post reply on HN
Print view View original

91–100 of 308 posts

Re: SEC charges Kraken for operating as an unregistered securities exchange

#91

Post by KrakenEng »

kklisura wrote: post #24
2OEH8eoCRo0 wrote: post #21

> 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's response was

> The SEC alleges that Kraken “commingled” its own funds with its clients’. This is a similar allegation already made of other crypto trading platforms. The SEC cannot and does not allege that any customer funds are missing, or any loss has occurred. Nor does it allege that any loss will occur. *The complaint itself concedes that this so-called “commingling” is no more than Kraken spending fees it has already earned.*

https://blog.kraken.com/news/kraken-continues-to-fight-for-i...

Re: SEC charges Kraken for operating as an unregistered securities exchange

#92

Post by az226 »

ForkMeOnTinder wrote: post #30
kklisura wrote: post #24

Earlier quoted context omitted.

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 aft…

The link you sent shows a 1.5 year old snapshot. So much for twice a year.

Re: SEC charges Kraken for operating as an unregistered securities exchange

#93

Post by kaiokendev »

jongjong wrote: post #80
jcranmer wrote: post #73

Earlier quoted context omitted.

Matt Levine I think put it best: if Bernie Madoff were to go to the SEC and ask them "I don't know how to run a Ponzi scheme legally, can you please update the guidelines to make it easier", of course the SEC is going to refuse. And the situation with cryptocurrencies seems to be broadly similar: there's actually a pretty clear answer as to what would need to be done to be fully above-the-board and legal, it's just n…

The SEC has no place in a free market. If people trust a company which co-mingles funds, they should be punished for misplacing their trust. Both the scammer and the scammed deserve a share of the punishment. Life naturally punishes the scammed already and teaches them a lesson at the same time... Without the help of the SEC... How good is that?! If my startup fails because I hired the wrong people, I take the full b…

> If people trust a company which co-mingles funds, they should be punished for misplacing their trust.

Most people can't do that, and even if they could, most people don't have the time nor the patience to do that

Re: SEC charges Kraken for operating as an unregistered securities exchange

#94

Post by pmulard »

jongjong wrote: post #80
jcranmer wrote: post #73

Earlier quoted context omitted.

Matt Levine I think put it best: if Bernie Madoff were to go to the SEC and ask them "I don't know how to run a Ponzi scheme legally, can you please update the guidelines to make it easier", of course the SEC is going to refuse. And the situation with cryptocurrencies seems to be broadly similar: there's actually a pretty clear answer as to what would need to be done to be fully above-the-board and legal, it's just n…

The SEC has no place in a free market. If people trust a company which co-mingles funds, they should be punished for misplacing their trust. Both the scammer and the scammed deserve a share of the punishment. Life naturally punishes the scammed already and teaches them a lesson at the same time... Without the help of the SEC... How good is that?! If my startup fails because I hired the wrong people, I take the full b…

The FDA has no place in a free market. If people trust a company which poisons their food, they should be punished for misplacing their trust. Both the scammer and the scammed deserve a share of the punishment. Life naturally punishes the scammed already and teaches them a lesson at the same time... Without the help of the FDA... How good is that?!

--

I'd much rather pool our money into a commission that does this for the population than spend every waking moment personally auditing companies for breaking the rules. Oh, and I have to set them too. No thanks.

Re: SEC charges Kraken for operating as an unregistered securities exchange

#95

Post by duskwuff »

kaiokendev wrote: post #93
jongjong wrote: post #80

Earlier quoted context omitted.

The SEC has no place in a free market. If people trust a company which co-mingles funds, they should be punished for misplacing their trust. Both the scammer and the scammed deserve a share of the punishment. Life naturally punishes the scammed already and teaches them a lesson at the same time... Without the help of the SEC... How good is that?! If my startup fails because I hired the wrong people, I take the full b…

> If people trust a company which co-mingles funds, they should be punished for misplacing their trust. Most people can't do that, and even if they could, most people don't have the time nor the patience to do that

More to the point, you generally don't know a company is commingling (and/or trading using!) customer funds until it's already too late.

Re: SEC charges Kraken for operating as an unregistered securities exchange

#96

Post by ascendantlogic »

kadoban wrote: post #68
ascendantlogic wrote: post #65

I feel like this won't end up going well for the SEC. This whole methodology of telling exchanges "I don't know, you figure it out" when they ask for clarity and then turning around and suing them for not figuring it out is extremely shaky legal ground.

Law enforcement has no obligation to explain the laws to you.

At some point someone has to explain to you what law you broke and how you broke it. We'll see how this goes for the SEC. I'm not convinced they're going to end up on the winning side with these vague enforcement lawsuits substituting for policy/law from the legislative branch.

Re: SEC charges Kraken for operating as an unregistered securities exchange

#97

Post by Loughla »

jongjong wrote: post #80
jcranmer wrote: post #73

Earlier quoted context omitted.

Matt Levine I think put it best: if Bernie Madoff were to go to the SEC and ask them "I don't know how to run a Ponzi scheme legally, can you please update the guidelines to make it easier", of course the SEC is going to refuse. And the situation with cryptocurrencies seems to be broadly similar: there's actually a pretty clear answer as to what would need to be done to be fully above-the-board and legal, it's just n…

The SEC has no place in a free market. If people trust a company which co-mingles funds, they should be punished for misplacing their trust. Both the scammer and the scammed deserve a share of the punishment. Life naturally punishes the scammed already and teaches them a lesson at the same time... Without the help of the SEC... How good is that?! If my startup fails because I hired the wrong people, I take the full b…

If the company says it doesn't co-mingle funds, but does, why should I be punished as a retail investor?

Re: SEC charges Kraken for operating as an unregistered securities exchange

#98

Post by clarkmoody »

pmulard wrote: post #94
jongjong wrote: post #80

Earlier quoted context omitted.

The SEC has no place in a free market. If people trust a company which co-mingles funds, they should be punished for misplacing their trust. Both the scammer and the scammed deserve a share of the punishment. Life naturally punishes the scammed already and teaches them a lesson at the same time... Without the help of the SEC... How good is that?! If my startup fails because I hired the wrong people, I take the full b…

The FDA has no place in a free market. If people trust a company which poisons their food, they should be punished for misplacing their trust. Both the scammer and the scammed deserve a share of the punishment. Life naturally punishes the scammed already and teaches them a lesson at the same time... Without the help of the FDA... How good is that?! -- I'd much rather pool our money into a commission that does this fo…

How many drugs had FDA approval that was later retracted after much harm was done?

Re: SEC charges Kraken for operating as an unregistered securities exchange

#99

Post by polygamous_bat »

armatav wrote: post #72
kadoban wrote: post #68

Earlier quoted context omitted.

Law enforcement has no obligation to explain the laws to you.

Except when they sue you for it.

They will happily explain it to the judge with you in the room, I believe.

Re: SEC charges Kraken for operating as an unregistered securities exchange

#100

Post by foooobaba »

pmulard wrote: post #94
jongjong wrote: post #80

Earlier quoted context omitted.

The SEC has no place in a free market. If people trust a company which co-mingles funds, they should be punished for misplacing their trust. Both the scammer and the scammed deserve a share of the punishment. Life naturally punishes the scammed already and teaches them a lesson at the same time... Without the help of the SEC... How good is that?! If my startup fails because I hired the wrong people, I take the full b…

The FDA has no place in a free market. If people trust a company which poisons their food, they should be punished for misplacing their trust. Both the scammer and the scammed deserve a share of the punishment. Life naturally punishes the scammed already and teaches them a lesson at the same time... Without the help of the FDA... How good is that?! -- I'd much rather pool our money into a commission that does this fo…

I am also glad the FDA protects us from chemicals and ingredients that would cause processed food to be unhealthy and harmful, if they didn’t do that we would probably end up with an overweight population and tons of food related health problems.
Post reply on HN