Yesterday, the well-known American exchange Kraken published its 2024 Kraken Transparency Report.
This is a report with which Kraken discloses information on compliance, to demonstrate their commitment to meeting legal and regulatory requests “in a way that is consistent with law enforcement and in line with our ideals”.
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The report di Kraken
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The report is focused precisely on the transparency of the exchange regarding regulatory compliance practices and its adherence to legal requests throughout 2024.
Kraken revealed that last year they received data requests from law enforcement and government agencies from 71 countries around the world.
The country that sent them the most requests was the USA, with 28.6%, but this record is actually more than expected, given that Kraken is a bull exchange.
Note instead that in second place is Germany, with more than 15%, and in third is Great Britain, with more than 10%. Only two other countries, Australia and Spain, are above 5%, while all the others, including Canada, France, and Italy, are below 5%.
In total, there were 6,826, of which 1,951 came from the USA agency. In particular, the agency that sent the most requests was the FBI, with as many as 614. It is worth noting that the second in the ranking, the Immigration and Customs Enforcement (ICE), stopped at 218.
The 2024
The data that stands out the most, however, is the 38.6% increase in combined data requests from law enforcement and regulatory agencies globally in just one year, compared to 2023.
Given that the USA as a whole stopped at 28.6% of the total, although Kraken does not say where the requests that caused the aforementioned increase mainly came from, it is reasonable to imagine that the increase was not caused solely by the USA agencies.
The United States had indeed started a campaign against the crypto markets already in 2022, particularly after the collapse of the US-based exchange, headquartered in the Bahamas, FTX.
Over the following years, those responsible for that failure were identified, arrested, and convicted, but until Trump’s electoral victory, the bull persisted.
From Kraken’s data, however, it seems that, at least in 2024, it is not only from the USA that more requests for data and information have arrived.
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The SEC
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The symbol of this struggle by the U.S. government agencies against the crypto markets has certainly been the SEC of Gary Gensler.
We remember that Gensler resigned as chairman of the SEC on the day Donald Trump took office, and was replaced by a new interim crypto-friendly chairman.
The Kraken transparency report reveals that the SEC sent only 1.9% of the total data requests to the exchange, but alone issued 37.3% of all requests from U.S. regulatory agencies.
In this case, however, the ranking of the highest requests coming from USA regulatory agencies sees the State Regulatory Agency in second place, slightly behind, at 34.31%, and in third place the CFTC with 26.47%.
This reveals that, although the SEC has been the most active agency from this point of view (compared to other US regulatory agencies), its activity does not seem to have been particularly unusual at all. Furthermore, if the SEC sent a total of 38 data requests to Kraken in 2024, while the FBI sent 614, it was certainly not the SEC that caused last year’s increase.
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Kraken’s response
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The exchange states that it has provided the requested data 57% of the time, and that these requests have concerned only 10,369 accounts, mainly from USA clients (34.5%), UK (8.8%), and Germany (8.5%).
While on one hand 10,369 accounts may seem like a lot, it should not be forgotten that Kraken actually has millions of customers, so the requests from government agencies concerned less than 1% of the customers.
In the report, the exchange states:
“We receive many types of information requests and Kraken adopts strict policies and procedures to comply with laws and regulations and protect customer privacy during the provision of data when we are legally obliged to do so”.
They also state that their Compliance Team is composed of expert AML professionals, lawyers, former law enforcement officers, analysts certified by the Association of Certified Anti-Money Laundering Specialists (ACAMS), and other professionals with certifications in the crypto field.
The exchange states that these professionals work to ensure that appropriate investigations and monitoring are conducted for clients and the industry, to efficiently and professionally meet the requests of law enforcement and regulatory agencies.
Furthermore, they also specify that they work tirelessly to protect customers’ private information through the dedicated design efforts of their Security Team and Data Privacy Team.
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