Two days ago, the U.K. Financial Conduct Authority (FCA) sent out an alert, informing everyone that the Kraken cryptocurrency exchange was an “unauthorized firm” that was operating illegally in the country. It based its warning and potential “scam” tag on information it found online that seemed to be tied to the exchange having a presence in the U.K., but it now appears that it may have been a little overexcited and pulled the trigger too early. After Kraken pointed out that it was not in the country (except through CryptoFacilities, which it acquired in 2019), the financial regulator was forced to take down the warning.
Kraken had asserted that the proof it wasn’t tied to the information the FCA found was glaringly obvious. The email addresses associated with the purported Kraken representatives were “gmail” addresses, which Kraken argued it would never use. All of its employees use only “Kraken” addresses, and the exchange explained to media, “The warning was based on Gmail addresses and phone numbers that belonged to investment scammers falsely using our brand and we’ve reached out to the FCA to get this clarified […] Kraken Futures (CryptoFacilities) is already registered with the FCA under the reference number 757895.”
The financial regulator didn’t bother issuing a mea culpa or any other type of acknowledgement that it had drawn an erroneous conclusion. The link to the original warning has been stripped from the agency’s website, and a search for “Kraken” doesn’t return any hits.
Kraken may be off the hook in the country, but another exchange isn’t. The BitMEX exchange has its own similar warning on the FCA’s website, which was published last Tuesday, the same day is the Kraken warning. The language between the two is identical, with the regulator saying of BitMEX, “We believe this firm has been providing financial services or products in the U.K. without our authorisation. Find out why to be especially wary of dealing with this unauthorised firm and how to protect yourself from scammers.”
While the information presented by the FCA about Kraken pointed to the use of “gmail” email addresses, this isn’t the case with BitMEX. Providing a little more legitimacy to the regulator’s claims, the email addresses listed appear to be tied directly to the company: email@example.com and firstname.lastname@example.org. The latter most likely being that of Ben Delo, the exchange’s co-founder. BitMEX hasn’t responded to the FCA’s warning.
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