Kraken CEO Jesse Powell on Crypto Regulation: ‘I Think There Could Be Some Crackdown’

Janet Yellen

In a discussion about regulating cryptocurrency, Kraken CEO Jesse Powell told CNBC, “I think there could be some crackdown.”

See: Biden Is Weighing New Rules for Bitcoin Investors – Here’s What Might Change
Find: Breaking Down the Basics of Cryptocurrency

Governments around the world have already started pulling rank on the electronic currency. Nigeria, the world’s second-largest cryptocurrency market after the United States, has banned the trading of crypto currencies, according to Deutsche Welle, a German media outlet.

In China, the Inner Mongolia region plans to ban new crypto currency mining projects and shut down existing activity in an effort to cut down on energy consumption, CNBC reports.

India has proposed to entirely ban the possession and trading of cyrptocurrencies, citing the desire to regulate electronic currencies through its own government, according to Reuters.

See: India Proposes Ban on Bitcoin — and the US Could Be Next
Find: 10 Best Cryptocurrencies to Invest in for 2021

Now, U.S. Treasury Secretary Janet Yellen is warning about the use of Bitcoin for money laundering, terrorist financing and other illegal activities. In February, Yellen made comments that sent the price of Bitcoin tumbling, telling The New York Times, “It’s an extremely inefficient way of conducting transactions. And the amount of energy that’s consumed in processing those transactions is staggering. But it is a highly speculative asset, and I think people should beware. It can be extremely volatile, and I do worry about potential losses that investors in it could suffer.”

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A recent anti-money-laundering rule proposed by the U.S. government would require people who hold their digital currency in a private digital wallet to undergo identity checks if they make transactions of $3,000 or more, CNBC reports.

Kraken’s Powell says, “Something like that could really hurt crypto and kind of kill the original use case, which was to just make financial services accessible to everyone.”

See: How Congress Used the New Defense Bill to Shut Down Banks, Trump and Russian Oligarchs
Find: Six Best Blockchain Stocks to Buy Right Now

Kraken was referring to the pseudonymous nature of crypto sales, where you can see where the funds are going but can’t see who sent them or who received them. It’s the same feature that Yellen worries could make it easier for terrorist and illicit organizations to conduct business.

Still, Yellen’s stance has been met with criticism, most recently by former acting director of the CIA Michael Morrell. In an independent paper, Morrell’s research broadly concluded that the generalization surrounding the use of Bitcoin in illicit finance is overblown and that blockchain analysis is a highly effective tool in fighting crime and gathering intelligence.

See: Biden to Take Over Trump’s Legal Battle with Owners of Bitcoin
Find: Breaking Down the Basics of Cryptocurrency

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The Kraken CEO added to CNBC, “Maybe the genie’s out of the bottle and just trying to ban it at this point would make it more attractive. It would certainly send a message that the government sees this as a superior alternative to their own currency.”

Kraken is currently one of the top 10 cryptocurrency exchanges in the world, ranking third as of April 14, according to CoinMarketCap.

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About the Author

Georgina Tzanetos is a former financial advisor who studied post-industrial capitalist structures at New York University. She has eight years of experience with concentrations in asset management, portfolio management, private client banking, and investment research. Georgina has written for Investopedia and WallStreetMojo. 

Kraken CEO Jesse Powell on Crypto Regulation: ‘I Think There Could Be Some Crackdown’
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