Bitcoin Exchange Kraken May Have Made Itself A Target By Dissing NY Attorney General Inquiry

New York AG Eric Schneiderman sent letters to 13 cryptocurrency exchanges seeking info on how they operate but Kraken refuses to answer it.

Bitcoin Exchange Kraken Rips NY Attorney General Eric Schneiderman
A. Katz / Shutterstock

New York AG Eric Schneiderman sent letters to 13 cryptocurrency exchanges seeking info on how they operate but Kraken refuses to answer it.

Jesse Powell, the CEO and founder of Kraken, may have made his bitcoin exchange a bigger target of the New York Attorney General’s investigation of cryptocurrency exchanges by refusing to answer a questionnaire that was sent to 13 crypto exchanges.

Powell dismissed New York Attorney General Eric Schneiderman in a blistering Twitter take-down.

“Somebody has to say what everybody’s actually thinking about the NYAG’s inquiry,” he tweeted. “The placative kowtowing toward this kind of abuse sends the message that it’s ok. It’s not ok. It’s insulting.”

Powell continued: “The AG’s tone-deaf response shows just how bad the disconnect really is. Not only are they apparently experts in what legitimate businesses desire, they are also experts in what’s important to consumers. I have a wild idea: how about we let the market decide?”

“Kraken left New York because New York is hostile to crypto, and this ‘questionnaire’ we received proves that New York is not only hostile to crypto, it is hostile to business. Good luck, New Yorkers.”

Jesse Powell made the sarcastic remarks shortly after bitcoin billionaire Tyler Winklevoss, half of the cryptocurrency duo of the Winklevoss twins, said he will cooperate with the attorney general’s probe into crypto exchanges like his Gemini platform.

The Winklevoss twins’ Gemini Trust Company was one of 13 cryptocurrency exchanges that were sent questionnaires by the New York Attorney General’s office, which launched a wide-scale “inquiry” into how the platforms operate and how they safeguard their customers’ assets.

The AG’s office said it launched the investigation amid escalating public interest in bitcoin, the proliferation of scams in the crypto ecosystem, and the frequent hacks that have plagued the virtual currency space.

winklevoss twins tyler cameron launch cryptocurrency block trades
Bitcoin billionaires the Winklevoss twins said they will cooperate with NY Attorney General. Craig Barritt / Getty Images

The questionnaire seeks information on the cryptocurrency exchanges’ operations, internal controls, and safeguards to protect customer assets.

Attorneys say Jesse Powell’s refusal to answer basic questions about his business may have made Kraken a bigger target than warranted.

“What I expect it will do is make Kraken an even more obvious target,” Justin Danilewitz, a former federal prosecutor and partner at Saul Ewing, told the New York Post.

Amy Spitalnick, a representative for New York Attorney General Eric Schneiderman, suggested Kraken is acting like it has something to hide — and that’s never a good thing.

“Legitimate entities generally like to demonstrate to their investors that their money will be protected,” Spitalnick said in a statement. “This is very basic information that any credible platform should have on hand and be willing to share with their investors.”

The NYAG’s questionnaire is due by May 1. It should provide some enlightening responses about the 13 largest cryptocurrency exchanges in the world.