Illustration shows Kraken cryptocurrency exchange logo
Reuters

KEY POINTS

  • The SEC sued Kraken earlier this year
  • The lawsuit ended in a settlement agreement, which included a $30 million penalty
  • "Message is clear: $30m buys you about 10 months before the SEC comes around to extort you again," Jesse Powell said

Jesse Powell, one of the founders of the centralized crypto exchange Kraken, cried foul at the U.S. Securities and Exchange Commission's (SEC) enforcement action against the exchange and accused the regulator of returning for "seconds" despite a $30 million settlement agreement reached in February.

The cryptocurrency industry was surprised and left in disbelief when news broke on Tuesday that the SEC has once again sued Kraken for unregistered operations and commingling funds.

Kraken denied the allegations and swore to "vigorously" defend its position.

Powell, who stepped down from his post as the CEO of the exchange this year, called the SEC "USA's top decel," a derogatory slang used to indicate one who wants to slow down technological progress, and labeled its latest enforcement action "another assault."

Aside from calling the SEC "masochists," Powell said that the commission "haven't been happy with the beatings they've been taking in NY and are shopping for a different flavor of RegDom in CA."

The Kraken co-founder noted the exchange had settled with the regulator on several issues 10 months ago and alleged it is now returning "for seconds."

Powell also urged businesses to conduct their operations outside of the "U.S. warzone."

"Message is clear: $30m buys you about 10 months before the SEC comes around to extort you again. Lawyers can do a lot with $30m but the SEC knows that a real fight will likely cost $100m+, and valuable time. If you can't afford it, get your crypto company out of the US warzone," Powell said in a tweet.

In February, Powell expressed regret about the exchange's decision to reach a settlement with the SEC and asked Congress to help protect the cryptocurrency industry.

The statement came shortly after SEC chair Gary Gensler's CNBC interview, where he mentioned Kraken's failure to register its staking service. The SEC chief said all it had to do was fill out the form available on the regulator's official website.

"Oh man, all I had to do was fill out a form on a website and tell people that staking rewards come from staking," Powell sarcastically said, noting that he "wish I'd seen this video before paying a $30m fine and agreeing to permanently shut down the service in the US. How dumb do I look? Gosh."

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