Cryptocurrency exchange Kraken is not backing down from its standoff with the New York attorney general’s office (OAG).
Crypto Exchange Asks Whether OAG Employees Manipulated Bitcoin Futures
In a series of tweets published over the last two days, the San Francisco-based company, which operates the world’s largest 16th-largest cryptocurrency exchange as measured by daily volume, has trolled the OAG in response to its recently-released report on crypto trading platforms.
That report, a culmination of its five-month “Virtual Markets Integrity Initiative,” levies several allegations against Kraken, including that it may be operating in New York unlawfully and has conveyed an “alarming” disregard for potential price manipulation in the cryptocurrency spot markets.
In its latest jab, Kraken’s social media team cheekily accused OAG employees of attempting to manipulate the bitcoin price by releasing its report just one day prior to the expiration of options exchange CBOE’s bitcoin futures contracts.
The exchange said:
“Is it a coincidence that this was published the day before the expiration of the @CBOE futures contract? Who traded on insider information and what is being done to prevent manipulation by @NewYorkStateAG employees? Quis custodiet ipsos custodes?”
In subsequent tweets, the exchange — alluding to the OAG report’s suggestion that Kraken may be operating unlawfully since it declined to fill out the agency’s questionnaire — said that because the OAG had not responded to its questions about whether it has taken formal steps to prevent employees from engaging in insider trading, the firm must conclude that regulators might be engaging in unlawful bitcoin futures trading.
“They have so far refused to comply with our inquiry in to the matter. Only conclusion we can make at this time is that they might be engaged in unlawful activity,” Kraken wrote, adding that while it had “no direct evidence” of insider trading the lack of response raises “red flags,” apparently poking fun at a Bloomberg reporter who had used that term in reference to Kraken.
Kraken Thanks OAG for Exposing Info on Competitors
Previously, Kraken published a tweet “thanking” the OAG for performing this market research at taxpayer expense, providing them with otherwise confidential information on their competitors. The firm said, “Thanks to the NY taxpayer for funding this research — saved our Product team a lot of time, and we got some interesting non-public info on our competitors.”
Meanwhile, Kraken CEO Jesse Powell issued a more pointed criticism of the OAG report, alleging that the state was like an “abusive, controlling ex” for continuing to stalk the company even though it left New York three years ago.
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