San Francisco-based cryptocurrency exchange Kraken’s chief executive on Tuesday noted that the company will “probably” register with the US Securities and Exchange Commission (SEC) as a broker-dealer and an alternative trading system (ATS).
“We would probably get registered as a broker-dealer and then an ATS,’’ Kraken co-founder and CEO Jesse Powell told Bloomberg in an interview in New York, where he was attending industry mega-conference Consensus. “I don’t think it necessarily helps the business. I think we’re doing everything right anyway.’’
Presently, Kraken and other cryptocurrency exchanges function in the country as money transmitter businesses, which are controlled at the state level. Coinbase which also has its headquarters in San Francisco has also considered registering as a broker-dealer.
SEC earlier this year released a bulletin advising cryptocurrency exchanges not to list security tokens without registering as a national securities exchanges and threatening to follow enforcement action against platforms that list unregistered securities.
The SEC will have additional power to oversee the platform if they register as an ATS. It will cut down on the chances for the SEC to take enforcement action against the exchange for registering tokens that the agency will consider as unregistered securities.
But registering as an ATS is a difficult process, and Powell noted it will only be possible if the SEC would offer more clarification regarding the regulatory status of cryptocurrencies and initial coin offering (ICO) tokens.
Former New York Attorney General Eric Schneiderman recently introduced an investigation into the operations of cryptocurrency exchange including companies such as Kraken. Even though numerous exchanges responded, Powell, criticized them for “kowtowing toward this kind of abuse” and noted that Kraken would not respond to the inquiry.
In the wake of this, Schneiderman was asked to step down from his position as a result of disgrace when four women accused him of physical abuse, setting Powell up to offer an arrogant punchline during a panel at Consensus.
“The AG doesn’t have any authority over us,’’ Powell added in the Bloomberg interview Tuesday. “Two things I really hate are bullies and hypocrites, and this guy is both.’’
He, later on, went on to state that he predicts Kraken going public in the future. He hopes that the company’s shares will be tokenized when that happens.
“If we could find a way to do that — to have the company’s stock traded as a token, I think that would be awesome,” he said.