Regulators make bad guys grow up and blow them up to serve their agenda – regulation

Crypto exchange Kraken CEO Jesse Powell says US regulators “let the bad guys get big and blow them up because it serves their agenda.” The executive explained, “Bad guys operate with tremendous competitive advantages. They suck up users, revenue and venture capital that would otherwise have gone to the good guys.”

Kraken CEO has a theory on US crypto regulation

Cryptocurrency exchange Kraken CEO Jesse Powell took to Twitter on Sunday to offer his opinion on crypto regulation in the United States. The executive began:

I have a theory: regulators let the bad guys grow up and blow them up because it serves their agenda.

Powell listed three goals he thinks regulators are trying to achieve. The first is to “destroy capital/resources in it [the] Crypto ecosystem,” he wrote. The second is to “burn people [and] Prevent adoption,” he continued, adding that the third is to “give air cover to attack good actors.”

The Kraken boss claimed to regulators: “The bad guys are actually on the site. Good guys are the enemy.” However, he emphasized, “If the bad guys can run long enough without exploding, they might kill the good guys for you.” Noting that bad guys “can still go to jail later,” cautioned Powell:

Villains operate with tremendous competitive advantages. They’re sucking up users, revenue, and venture capital that would otherwise have gone to the good guys.

In another tweet, Powell commented on how regulators often request more funding from Congress to regulate the crypto sector more effectively. “Funding is the obvious scapegoat. “If we had had a bigger budget we could have caught it.” The facts don’t support that, but instead of imposing real consequences for failure, we reward with bigger budgets. The glory is in disaster relief, so politicians fabricate disasters,” he said.

Earlier this month, the US Securities and Exchange Commission (SEC) took action against Kraken for its staking program. The crypto exchange settled with the SEC, ending its staking program for US clients and agreeing to pay $30 million in disgorgement, prejudice interest and civil penalties.

Powell also recently expressed his frustration at how regulators ignored his warning of illegal activity in the crypto space and then slammed his exchange with enforcement action. Without specifically mentioning the collapsed crypto exchange FTX, the Kraken boss tweeted on Friday:

I can’t tell you how annoying it is to have the regulators pointing out massive red flags and blatantly illegal activity, only for them to ignore the issues for years. “They are offshore. It’s complicated. We look at each other.’ YEARS. Then serve as their example.

What do you think of Kraken CEO Jesse Powell’s theory that regulators in the US make bad guys big and then don’t fit their agenda? Let us know in the comment section below.

Kevin Helms

As a student of Austrian economics, Kevin discovered Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open source systems, network effects and the interface between economics and cryptography.

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