Kraken Has No U.S. SEC Registration Plans
Cryptocurrency exchange Kraken has a bold new strategy - fight regulations. It was announced that they have no plans to delist tokens the U.S. Securities and Exchange Commission has labeled as securities, or to register with the agency as a market intermediary. Kraken is not a small fish, with more than nine million clients they are trying to throw their weight around. It also underscores the current market appetite for regulations and shows the challenges the securities regulator is facing in its effort to rein in the crypto industry.
Kraken, which made news earlier this year when it denied requests to block the digital wallet addresses over the Russian invasion of Ukraine has long championed the libertarian values and decentralization associated with cryptocurrency. Incoming chief executive officer Dave Ripley has promised to stay the course on the company's culture and past decisions.
For those that don't know, controversial co-founder Jesse Powell will step down. Ripley will assume the CEO role after the firm hires a new COO. I'm interested to see how this change will impact the direction of the company. Right now it seems like things will stay the course, but if pressure grows I believe Ripley will change his tune. The crypto market is in a tough spot, with bitcoin down nearly 60% this year, but also as the industry has been at odds with regulators. These conditions are putting a lot of pressure on companies in the space. Currently, the SEC is scrutinizing Coinbase for listing several tokens on its platform the regulator identified as securities in a July insider trading lawsuit. However, Ripley has said he sees no reason to register with the SEC as an exchange because his company does not offer securities.
I actually agree Ripley and Kraken's choice that most cryptos are not securities and there is a lot of overreach with regulations, but I'm also realistic that we need some about regulation to foster adoption. I think if Kraken get's enough pressure in this bear market they might fold under the pressure. We are in a very interesting time for financial markets and the companies that operate in the space. I look forward to seeing how the roll out of regulations will impact the market in the next few years.
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