The SEC has been exerting increased pressure on several well-known cryptocurrency enterprises. After a brief time, the regulator took action against the cryptocurrency exchanges Binance and Kraken.
It also levied a punishment of $30 million, which the exchange has already paid, and also shut down the staking services offered by Kraken. However, in recent events, the former CEO of Kraken, Jesse Powell, has attacked the SEC for its regulatory enforcement of digital enterprises, even though the firms have been taking steps to comply with the regulations.
SEC Harassing Legitimate Businesses, Ignoring Bad Actors
Powell took (1) to Twitter not too long ago to make the point that the regulatory approaches taken by the SEC are contributing to an inequity in the cryptocurrency business.
The former CEO observed that dishonest players had maintained their scams despite the regulator actively searching for reputable crypto exchanges. Powell is concerned that the distraction could negatively impact bitcoin and put legitimate crypto companies out of business.
The former chief executive officer investigated why the regulators allowed the dishonest businesspeople to remain in operation. According to Powell, enterprises of this dubious kind contribute to the covert goals of the regulators.
The presence of harmful platforms will result in the loss of valuable resources inside the cryptocurrency industry, slowing global crypto growth and acceptance rate.
In addition, Powell stated that the actions of the nefarious actors would result in financial losses for investors. Because of their lack of skill, they will bring down significant participants in the digital space.
Authorities Ignoring Warnings
Powell's criticism of authorities comes after a series of events that directly contrast his earlier warning to watchdogs.
A tweet from CryptoSlate showed that Powell and Caitlin Long, who are the the CEO and founder of Custodia Bank, informed regulators of imminent doom through crypto frauds and fraud in the industry.
On the other hand, the watchdogs did not pay any attention to the whistled alert.
According to the report written by Caitlin Long, she gave law enforcement agencies evidence regarding probable criminal activity on the part of a large cryptocurrency corporation.
Caitlin claimed that her warning was issued a few months before the collapse of the corporation, which resulted in the loss of financial resources for millions of the company's consumers. Also, the Chief Executive Officer of Custodia Bank informed bank regulators of her warning.
Caitlin is not pleased with the turn of events that saw authorities begin their quest for Custodia Bank despite the real approaches taken by the bank.
Custodia's Chief Executive Officer (CEO) indicated that the company has been working on obtaining federal regulation to fulfill the requirements set forth by bipartisan legislators in the United States.
Caitlin is also working on the passage of a measure that will regulate the digital asset market and is seeking support from both political parties. These regulations will operate in a manner comparable to the supervision of mutual funds that began in the 1940s.
Powell and Caitlin Long failed to specify the specific digital companies they had cautioned authorities about in their statement.
On the other hand, anyone who has a solid understanding of the digital asset business can determine an example of a hypothetical company that fits this description from the reports.