Two Birds, One Stone

Kraken, one of the largest exchanges in the U.S., recently shut down its staking services and paid a $30 million settlement over selling unlicensed securities. This comes after Binance, another large exchange, was under fire for different reasons. Jesse Powell, the former Kraken CEO, believes that regulators may be allowing bad actors to carry out their schemes in an attempt to put cryptocurrencies in a bad light and shut down genuine exchanges. Powell and Caitlin Long, the founder and CEO of Custodia Bank, both warned regulators of certain fishy deals in the crypto industry, but no action was taken. Long is now pushing for a bipartisan bill that would regulate the crypto industry the same way mutual funds became properly supervised in the 1940s. It is possible that both Long and Powell’s advice was heeded by regulators, who are simply keeping it under wraps for now. This case is understandably frustrating for those who sounded the alarm to regulators ahead of time, but it is important to note that details of legal investigations are often unsealed years, if not decades later.