Kraken exec says it aims to ‘build trust’ one hour before SEC probe leak

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—by Protos Staff
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The Securities and Exchange Commission (SEC) is almost done investigating major crypto exchange Kraken for potential unregistered securities sales, a person familiar with the matter told Bloomberg.

A settlement could be expected in the ‘coming days,’ the outlet reports, yet it remains unclear which tokens or offerings are under the US regulator’s scrutiny.

The exchange has historically battled with a less than reputable public image — from concerning reports of workplace harassments to suing employees for leaving honest reviews on Glassdoor.

  • Its co-founder Jesse Powell stepped down from his role as CEO in September.
  • By late November, Kraken settled with the Treasury’s Office of Foreign Assets Control after a three-year long investigation for potentially violating US sanctions against Iran.
  • It paid $362,000 and agreed to invest a further $100,000 into sanctions compliance controls.

Kraken chief of strategy gives PR spiel one hour before SEC leak

Now, news of the ongoing probe comes as Kraken struggles to stay afloat amidst a brutal crypto winter. Its head of strategy, Thomas Perfumo, appeared on CoinDesk TV right before Bloomberg broke the story of the SEC investigation — which, until now, has been kept under wraps. The exchange isn’t “insulated from the broader macro and economic environment,” Perfumo said, adding that crypto winter “definitely had an effect on the business.”

Indeed, Kraken laid off 30% of its employees — 1,100 staff — in November. It closed its Abu Dhabi office less than a year after securing a local license and plans to leave Japan, as well.

We ranked crypto companies with Glassdoor — it opened a rabbit hole
A Protos investigation delved into Kraken’s shady Glassdoor dealings last year.

Read more: Kraken chief Jesse Powell steps down before possible stock market debut

Perfumo told CoinDesk that Kraken is narrowing its scope to some parts of the business that “are likely to drive the greatest amount of impact.” Its goal is to rebuild “trust and reputation within the industry,” he said, just an hour before the SEC probe hit the internet.

Last year, the Commodities Futures Trading Commission (CFTC) found Kraken had failed to register as a Bitcoin futures merchant and was illegally selling crypto margin products. Kraken agreed to pay a $1.25 million fine.

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