Kraken Refuses to Respond to New York AG’s Inquiry

Kraken, the San Francisco-based cryptocurrency exchange, does not have any plans of responding to the New York Attorney General’s recently revealed inquiry into the ecosystem.

Earlier reports said that Kraken was one of 13 exchanges that were given a letter from Eric Schneiderman, New York’s Attorney General on April 10, Tuesday. The letter is part of New York AG’s latest inquiry into crypto exchanges. In general, most of the crypto exchanges welcomed the inquiry by saying that they would readily fill out the attached questionnaire. Kraken, on the other hand, took a different approach regarding the reported inquiry.

Through an email sent early morning of Wednesday, April 17, CEO Jesse Powell stated, “Kraken’s BitLicense-prompted exit from New York in 2015 pays another dividend today.”

The Kraken CEO clarified that the company has no intention of answering the questionnaire adding:

“I realized that we made the wise decision to get the hell out of New York three years ago and that we can dodge this bullet.”

Earlier, Kraken had announced that it would leave the state in 2015 because of BitLicense New York’s cryptocurrency regulatory framework. During that time, the crypto exchange through a blog post branded the law as “a creature so foul, so cruel that not even Kraken possesses the courage or strength to face its nasty, big, pointy teeth.”

On Wednesday, Powell wrote that Kraken is generally happy to engage with government agencies but criticized the AG’s approach. He added, “Why don’t you try extracting this information from those businesses actually operating in your state?”

An Attorney General’s office spokesperson, who learned about Powell’s remarks, said via email:

“Legitimate entities generally like to demonstrate to their investors that their money will be protected. This is basic information that credible platforms should all have on hand.”

While other exchanges, and not only Kraken, have also left New York due to the BitLicense, a number of state authorities continue to commend the regulations.

Last week, Maria Vullo, the superintendent of the New York Department of Financial Services said, “The regulatory structure that we created for virtual currency has helped our licensed companies attract greater interest from customers, investors, and potential financial services partners.”

Still, state legislators are looking at the possibility of revising the framework or even completely scrapping it. So much so that industry stakeholders lambasted the BitLicense during a roundtable discussion last February. This prompted senators, who hosted the discussion, to pledge that they will explore ways as to how the license may be revised in light of those concerns.