“I can’t support that kind of approach with regulators. It’s never been successful historically, and from our experience, we’ve found the SEC to be open to discussion,” Kraken’s chief legal officer.
In the midst of a tumultuous era for certain high-profile US crypto firms and financial regulators, Kraken’s chief legal officer (CLO) is urging caution in the future.
“You’re living in a fantasy world if you don’t believe that this business is going to face tougher, more Wall Street-like regulation from governments in the United States and abroad,” CLO Marco Santori said on Bloomberg’s “QuickTake Stock” broadcast on Thursday.
Santori’s remarks come after the US Securities and Exchange Commission (SEC) threatened to sue well-known crypto exchange Coinbase earlier this month over a crypto yield program that is deemed a security.
The move prompted the exchange’s CEO, Brian Armstrong, to take a belligerent and adamant stance on social media, however, the exchange has now announced that the program in question will be scrapped, as requested by the SEC.
“I’ve absolutely followed Brian’s tweets, and I’ll say that look, you’re simply not being honest with yourself with the crypto community if a tiny portion of you doesn’t think he’s stating what a lot of people are thinking,” Santori said in response to the developments. He quickly shifted gears, articulating the more pragmatic approach he’s pursuing at Kraken:
“I can’t support that kind of approach with regulators. It’s never been successful historically, and from our experience, we’ve found the SEC to be open to discussion.”
Financial regulators in the United States have stated that they intend to implement a slew of policy changes this year, including token offerings, decentralized finance (DeFi), stablecoins, custody, exchange-traded funds, and lending platforms, particularly under the leadership of SEC chair Gary Gensler.
Despite his aggressive tone, Gensler has urged industry stakeholders to work with the agency in the future. With the regulatory landscape still shifting, the crypto markets are becoming increasingly sensitive to the potential consequences of each regulator’s crypto-related public initiatives.