Kraken: US Subpoenas Turning Into “Barrier to Entry”

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Crypto exchange Kraken has stated the subpoenas issued by the United States government are starting to become “barrier to entry” in the country.

In a January 5 tweet, Kraken has posted an infographic derived from the exchange’s “2018 Transparency Report,” showing the number of law enforcement and other inquiries it has received from different state agencies across the world has nearly tripled year on year.

In 2018, the exchange has received a total of 475 subpoenas whereas it has received only 160 in 2017. Most of the subpoenas have come from the U.S., followed by U.K. with 61, and Germany with 34.

Kraken’s tweet states:

“You can see why many businesses choose to block US users.”

Of the 475 subpoenas sent by U.S. agencies, 91 have come from the Homeland Security Investigations (HSI), 67 from the Federal Bureau of Investigation (FBI), and 40 from the Drug Enforcement Administration (DEA). Meanwhile, the Securities and Exchange Commission and The Commodity Futures Trading Commission has sent a combined 29 requests.

In a Twitter thread, the California-based crypto exchange states that it receives requests for “all transactions, which could be petabytes of data when they actually only need the withdrawals from last week for one guy.” The company adds by saying that such government inquiries put a strain on the exchange’s resources because they often need a “significant amount of education.”

Replying to the question as to why the company received more inquiries from the U.S. government, Kraken has replied:

“US is about 1/5 of clients but 2/3 of requests. US agencies are much more active and are much less surgical. For many requests, we have no matches. It wouldn’t be surprising to find that the same subpoenas go out to everyone in the hopes that a match will be found.”

Kraken has been highly critical of the U.S. bureaucracy. As previously reported by CoinWire, Kraken CEO Jesse Powell in April said that would not comply with an inquiry initiated by the New York Attorney General (NYAG) on crypto exchanges.

When NYAG published its report in September stating that numerous crypto exchanges are susceptible to market manipulation, Powell posted on Twitter saying:

“NY is that abusive, controlling ex you broke up with 3 years ago but they keep stalking you…”