San Francisco-based cryptocurrency exchange Kraken isn’t planning to respond to the New York Attorney General’s newly unveiled inquiry into the ecosystem.
Kraken was one of 13 exchanges that received a letter from New York Attorney General Eric Schneiderman on Tuesday as part of his new inquiry into cryptocurrency exchanges, as previously reported. While most exchanges generally welcomed the inquiry and said they would fill out the attached questionnaire, Kraken took a different tack when reached for comment.
“Kraken’s BitLicense-prompted exit from New York in 2015 pays another dividend today,” CEO Jesse Powell said via email early Wednesday morning.
Powell made it clear that Kraken does not intend to answer the questionnaire, saying:
“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.”
Kraken announced that it would leave the state in 2015 due to the BitLicense, New York’s cryptocurrency regulatory framework. In a blog post at the time, the exchange called the law “a creature so foul, so cruel that not even Kraken possesses the courage or strength to face its nasty, big, pointy teeth.”
Powell wrote Wednesday that Kraken is generally happy to engage with government bodies but criticized the AG’s approach, adding: “Why don’t you try extracting this information from those businesses actually operating in your state?”
A spokesperson for the Attorney General’s office, who saw Powell’s remarks, told CoinDesk 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 Kraken is not alone in having left New York due to the BitLicense, some state authorities continue to praise the regulations.
“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,” New York Department of Financial Services superintendent Maria Vullo said last week.
Yet lawmakers in the state are looking at the question of revising the framework – or doing away with it entirely. Indeed, during a roundtable discussion in February, industry stakeholders blasted the BitLicense, prompting a pledgefrom the state senators that hosted it to look at how it may be reworked in light of those concerns.