Kraken, one of the most influential cryptocurrency exchanges in the United States of America and the whole world, is blaming the US government, at least partially, for the difficulties encountered by people to enter the crypto industry.
According to the platform, the cost of handling government subpoenas is quickly becoming a “barrier to entry” in America. Kraken recently published its “2018 Transparency Report,” and in the past weekend (on Saturday,) it tweeted an infographic explaining that law enforcement agencies and related inquiries from governmental institutions have tripled when compared to those of last year.
The exchange informed that it received 160 subpoenas in 2017, but the number jumped all the way to 475 in 2018, showing how the US government is making matters complicated for both crypto exchanges and users. Of the 475 total subpoenas, 315 came from American agencies, comfortable more than half. The United Kingdom, with 61 requests, followed the Americans in second place, and Germany was third on the notorious ranking with 34.
A subpoena is a legal term that refers to a request for the production of documents, or a request to appear in court or any legal proceeding. It could require testifying, presenting evidence or information, or any related activity. The word means “under penalty:” not complying with the terms of the subpoena may result in civil or criminal penalties.
The Raw Numbers
“You can see why many businesses choose to block US users,” Kraken stated in its Twitter feed. The Department of Homeland Security Investigations (HSI) issued the most subpoenas out of the 315 in the United States, with 91. The FBI followed with 67 and the DEA (Drug Enforcement Administration (DEA) was third with 40. The SEC (Security Exchange Commission) and the CFTC (Commodity Futures Trading Commission) made 29 requests between the two.
In one of the answers of a Twitter thread, the exchange platform explained that it gets subpoenas for “all transactions, which could be petabytes of data when they actually only need the withdrawals from last week for one guy.” The inquiries, according to the firm, are “taxing” on the resources it has, because “significant amount of education and back-and-forth” is needed.
Why so many US Inquiries?
When confronted with the question about why it receives so many inquiries from American law enforcement agencies, Kraken answered that “US is about 1/5 of clients but 2/3 of requests. US agencies are much more active and are much less surgical. For many requests, we have no matches. It wouldn’t be surprising to find that the same subpoenas go out to everyone in the hopes that a match will be found.”
Kraken has made no secrets about its anti-government stance. Its CEO Jesse Powell, for example, declined to comply with an inquiry from the New York Attorney General (NYAG) in April 2018. “I realized that we made the wise decision to get the h*** out of New York three years ago and that we can dodge this bullet,” he said back then.
By Andres Chavez