CLAIM: KRAKEN AND THE SEC: Beyond Rumors, Calvin Ayre Claims Kraken Is Under SEC Investigation, To Release Evidence

Whatever your opinion happens to be about Bitcoin Cash, Bitcoin ABC, or Bitcoin SV (the prevailing opinion across the crypto ecosystem is decidedly negative) and the current ‘hash war’ it seems to be uncovering all sorts of ‘sludge’ in the crypto underbelly.

All manner of spats, quarrels, power struggles, and out and out greed is playing out right in front of us and it is having a decidedly negative effect on the overall value of the crypto markets.

**If we can speak for the larger crypto community – stop it guys. This looks and feels like a high school Instagram cat fight. The sooner it is over and forgotten, the better.**

Until it is over a few new headlines have found there way into our inboxes. Specifically Calvin Ayre and his proclamations that Kraken is under SEC investigation.

Ayre did not provide evidence for the accusations, which he’s promising to release “next week.”

While Kraken has yet to publicly react, Ayre’s words could well end up buried beneath the mountain of rhetoric, which has emerged on social media from all parties in the BCH debacle over the past week.

If true (and that is a big ‘if’ given the immature nature of the BCH battle) it would further develop our exchange story from last week. US authorities continue to evaluate and develop enforcement actions within the crypto space.

To be clear an investigation is much different than an enforcement action, an indictment, or even ongoing conversations to bring an entity into compliance. Still, there is an expectation that the SEC has a long line of coming actions in there crypto ‘zip drive’.

From last week:

Several sources from the AML/CFT, SEC, crypto hedge funds, and other crypto sources have given us thoughts and opinions on where this roadmap could lead and who could be next. Here are parts of those conversations and some explanations as to who, why, where, and when.

A former AML/CFT enforcement agent had this to say based on background conversations with two contacts at the SEC:

“There will be more actions taken. That much I am certain about. Geography is not a factor as they formulate any strategy and are having back-channel conversations. One important point to make here, sticking your thumb up the nose of the SEC over the past six months, or any other regulatory agency, has been noticed and cataloged. It is incredibly stupid to basically dare a federal or state organization to come after you. Which led our conversation to Kraken and the dialogue there CEO decided to air in public. They are firmly in the crosshairs here.”

Further dialogue regarding Kraken and their potential issues with authorities is the reason that their CEO, Jesse Powell, made claims regarding registering with the SEC earlier this year.

Yet making claims and pursuing registration is different than finalizing the process and removing yourself from any pending enforcement action. That could be at the center of Calvin Ayre’s allegations.

And we’ve said this multiple times, it is never a good idea to thumb your nose at regulators:

“I expect Kraken and Bitfinex to be the headliners to get punk’d at some point. How, when, or for what is anybody’s guess at the moment. But one of them has actively antagonized regulators (Kraken) and the other has played all sorts of legal and geographic games specific to avoiding regulators (Bitfinex). Should the SEC begin to really get frisky and take on Bitfinex that would be serious and cause some price destruction. Were I to offer a guess, I think Kraken gets slapped and Bitfinex finds a way to avoid *public* enforcement. I could see a way that a backroom conversation occurs and Bitfinex is given a ‘deal they can’t refuse’ to clean some things up.”

Regulatory actions are in process and are probably in ‘back-channel discussions’ at the moment. Calvin Ayre’s claims may be legitimate, but that doesn’t mean that Kraken is going to get killed. It may mean nothing more than a fine and registration with the SEC.

Let’s see if Ayre is actually holding the cards he claims to be or is it simply a full-throated bluff.