The United States Securities and Exchange Commission (SEC) has been cracking down on some prominent crypto firms. The regulator tackled Binance and Kraken crypto exchanges within a very short period.
It closed Kraken’s staking services and issued a fine of $30 million, which the exchange has paid. But in a recent development, the former CEO of Kraken, Jesse Powell, criticized the SEC on its regulatory enforcement of digital firms amid all compliance efforts by the firms.
Regulators Focus On Genuine Firms While Laying Aside The Bad Actors
Recently, Powell took to Twitter to mention that the SEC regulatory strategies are creating an imbalance in the crypto industry. The former executive noted that while the regulator is busy hunting genuine crypto exchanges, bad players have continued their schemes. Powell believes the diversion might paint cryptocurrency black and shut down good crypto companies.
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The former CEO analyzed why the regulators left the bad actors to continue in business. According to Powell, such suspicious firms help the regulators’ hidden agendas.
The bad platforms will destroy resources within the crypto space, thereby dragging down the growing crypto adoption and acceptance globally. Further, Powell stated that the activities of the bad actors would lead to losses for investors. They will take down prominent digital participants with their incompetency.
Regulators Ignored Warning And Whistle Blowing About Crypto Scams And Fraud
Powell’s criticism of regulators comes after some events conflicted with his previous warning to watchdogs. A tweet from CryptoSlate revealed that Powell, and Caitlin Long, the CEO, and founder of Custodia Bank, warmed regulators on impending doom through crypto scams and fraud in the industry. However, the watchdogs paid no attention to the whistle-blowing alert.
According to Caitlin Long’s report, she provided law enforcement agencies with evidence regarding potential crimes by a big crypto firm. Caitlin mentioned that her warning came several months before the company’s implosion, which drained the funds of millions of its customers. Also, the Custodia Bank CEO disclosed her warning to bank regulators.
Despite its genuine approaches, Caitlin is not happy with the twist of events as regulators started hunting Custodia Bank. The CEO mentioned that Custodia has been trying to gain federal regulation, following the requirements of bipartisan policymakers in the U.S.
Caitlin is also working toward a bipartisan bill regulating the digital asset industry. Such rules will be similar to mutual funds supervision that kicked off in the 1940s.
Powell and Caitlin Long did not mention the particular digital firms they warned regulators about. However, anyone with good knowledge of the digital asset industry could deduce a possible example of such a firm in their reports.
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