Regulators are to blame for all the crisis in Crypto, says Kraken CEO
Jesse Powel, co-founder and CEO of Kraken, a cryptocurrency exchange, thinking users should blame regulators for the ongoing crises in crypto.
Kraken CEO: Are regulators bent on killing crypto?
While responding to a tweet on February 20, Jesse theorized that regulators have taken a step back so the bad guys can get big before they blow up because, in his opinion, “it serves their agenda.”
Ecosystem resources and capital are destroyed every time such a horror happens in crypto. At the same time, people get burned, which discourages adoption, negatively for the industry. Also, Jesse notes that Regulators seem to have “good air cover” when there is a burst to attack good players in the sphere.
The crypto industry is still evolving, even though the underlying technology has been around since 2009, when Bitcoin was first launched.
But despite the times, cryptocurrencies have gained mainstream adoption after the ICO hysteria of 2017-2018. The past five years have seen several innovations in fundraising, with the launch of DeFi protocols and NFT projects being one of the big highlights.
According to Powell and other experts, regulators tasked with creating a fair environment and protecting investors have been slow to adapt amid this explosion of tokens and projects. Policymakers have yet to develop drafts that clearly define most cryptocurrencies in most jurisdictions.
SEC Crackdown on Good and Bad Projects
For context, in the US the Securities and Exchange Commission (SEC) only recognizes Bitcoin as a commodity. On several occasions, SEC officials have said that most cryptocurrencies are unregistered securities.
Ripple Inc., a blockchain company, has an ongoing case with the SEC after its executives were sued for selling XRP, which the regulator insisted was offered to investors as an unregistered security.
Last week, the SEC sent a Wells notice to Paxos, the issuer of BUSD, saying that the stablecoin is an unregistered security.
The absence of clear rules and regulators, especially in the US, which is cracking down on the crypto industry, including exchanges and stablecoin issuers, is what Jesse wants to change.
He argues that regulators should take a “proactive” approach and not wait for a crisis to act, picking off good crypto projects as enemies.
The Kraken CEO adds that bad companies already operate with “huge competitive advantages” as they suck up users, revenue and venture capital that would otherwise go to good projects.
Kraken recently settled with the SEC for $30 million with an agreement that they shut down their crypto betting service in the US.
Feature image from Canva, chart from TradingView
