Kraken’s response to the New York Attorney General’s (NYAG) questionnaire is a ballsy one. But was it the right decision?
One can see where Kraken is coming from — NYAG’s decision to send such a detailed questionnaire out to be answered in a short period of time seems arbitrary. But then again, if you were a regulator, why should you pander to the growing crypto world? After all, the blockchain and crypto world does not in anyway benefit regulators who are tasked with policing financial markets. As one crypto exchange operator in Asia told CNA once, many management level regulators in central banks in Asia actually wish that they did not have to deal with crypto exchanges and hence have no interest in sitting down with exchange operators to fine tune regulation. That may be the general rule, but there are exceptions. The wiser regulators are the ones who realise that cryptocurrency trading is not going away; that its citizens are going to increasingly trade; that working with crypto exchanges and regulating them with new rules is the smartest move.