Kraken has refused to comply with New York Attorney General Eric Schneiderman's information request. The San Francisco exchange received a letter from Schneiderman's office on Tuesday, joining 12 othe
Kraken has refused to comply with New York Attorney General Eric Schneiderman's information request. The San Francisco exchange received a letter from Schneiderman's office on Tuesday, joining 12 other platforms in the inquiry. The others included Coinbase's GDAX, Gemini, bitFlyer USA, Bitfinex, Bitstamp USA, Bittrex, Poloniex, Binance, Tidex.com, Gate.io, itBit, and Huobi.Pro.
Schneiderman sent questionnaires asking for details on ownership structures, operational procedures, fee schedules, trading policies, service interruptions, internal controls, privacy protections, anti-money-laundering practices, customer fund safeguards, and internal documents. All exchanges must submit responses by May 1st.
Jesse Powell, Kraken's CEO, posted a statement on Twitter announcing the refusal. He said the resource burden would be "massive" and would "completely blow up our roadmap." Powell pointed out that Kraken had decided to leave New York three years earlier, meaning the exchange could "dodge this bullet." He added: "Ordinarily, we're happy to help government understand our business, however, this is not the way to go about it."
Gemini CEO Tyler Winklevoss applauded the investigation.
Kraken exited New York in 2015 over the state's BitLicense framework. At the time, the company described the regulatory scheme as "a creature so foul, so cruel that not even Kraken possesses the courage or strength to face its nasty, big, pointy teeth."
In its statement on the current request, Kraken emphasized that prior compliance with New York had resulted in BitLicense complications. "New York is hostile to crypto and this 'questionnaire' we received today proves that New York is not only hostile to crypto, it is hostile to business," the company wrote.
Kraken also announced plans to stop offering trading services to Japan residents by June. Rising operational costs drove the decision. According to Bloomberg, the exchange might return to the Japanese market at some point.
"Suspending services for Japan residents will allow us to better focus our resources to improve in other geographical areas," the company said in a statement. "This is a localized suspension of service that only affects residents of Japan and does not impact services for Japanese citizens or businesses domiciled outside of Japan."
