U.S.-based cryptocurrency exchange Kraken is being called out by the U.K.’s Financial Conduct Authority (FCA) for allegedly offering its services to Brits. While the idea of serving customers in the country isn’t necessarily a problem, it is if no license is held. According to the FCA, Kraken doesn’t have a license, making it an “unauthorized firm” operating in the country.
The FCA released a statement yesterday specifically on Kraken, explaining, “We believe this firm has been providing financial services or products in the U.K. without our authorization. Almost all firms and individuals offering, promoting or selling financial services or products in the U.K. have to be authorized by us.” It adds, “This firm is not authorised by us and is targeting people in the U.K.. Based upon information we hold, we believe it is carrying on regulated activities which require authorisation.”
Kraken believes that the notice is incorrectly targeting the company, and that the information the FCA reportedly holds belongs to scammers, not to the company. It responded to the allegations in a statement to Financial Magnates that reads, “Those email addresses and phone numbers do not belong to our company. We do not have any outbound phone numbers and all our employees use ‘@kraken.com’ emails rather than ‘@gmail.com.’”
As the old saying goes, the truth always comes out, and it wouldn’t be difficult to determine whether or not the U.K.-based Kraken operations are, or are not, legitimate. Given the company’s track record of skirting its legal and ethical responsibilities, it wouldn’t be difficult to take the FCA’s word on the subject.
Kraken was one of the first exchanges to leave New York when, in 2015, the state implemented its BitLicense program requiring crypto exchanges to register in the state. It also opposed Canada’s efforts to enhance crypto regulations in the country last year.
Kraken has also been involved in several lawsuits over questionable decisions. United American Corp. sued the company almost a year ago, including Bitmain, Bitcoin.com, Roger Ver and others as defendants, over antitrust concerns surrounding activity tied to Bitcoin Cash (BCH) movement and possible manipulation. That case is still in the works and, at the same time, the exchange is having to defend itself against a former employee claiming the company engages in “unethical and illegal tactics.” Another lawsuit led by former employee Jonathan Silverman asserts that he is still owed almost $1 million in compensation.
It’s no secret that there’s no love lost between Kraken and Bitcoin SV (BSV) after the exchange made the arbitrary decision to delist the coin; however, one has to wonder why a crypto company would be so intent on avoiding operating in regulated markets under the same guidelines applied to other financial activity, and why it would think it’s entitled to irrationally keep 10% of users’ holdings.
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