Kraken CEO: “2025 will be the year of friendlier regulations”

On June 20, 2024, Dave Ripley, CEO of Kraken, appeared on CNBC’s “Squawk Box” to discuss the state of the cryptocurrency market, Kraken’s regulatory battles with the US SEC, and the overall regulatory outlook for the industry. Below is a comprehensive summary of the key points discussed during the interview.

The state of the cryptocurrency market

• Ripley has seen significant improvement in the cryptocurrency market compared to the previous year.
• He highlighted the rise in Bitcoin prices and the overall positive market sentiment.
• Ripley said Kraken achieved significant success during the year due to strong market performance.

Kraken’s regulatory challenges to the SEC

• Kraken is currently engaged in a legal battle with the SEC.
• The company has settled one issue with the SEC and another is pending.
• Ripley mentioned that oral arguments are being held today on the motion to dismiss.
• The SEC says some digital assets qualify as securities, which Kraken disputes.
• Ripley highlighted the lack of a clear path to register these digital assets as securities.

Regulatory landscape

• Ripley compared the US regulatory environment to other regions such as Europe, the UK, Canada and Australia, which have more defined regulations for digital assets.
• He criticized the U.S. approach of “regulation through enforcement,” allegedly led by the SEC.
• He thanked Congress for its efforts to pass meaningful legislation, mentioning the recent passage of the FIT 21 Act in the House with strong bipartisan support.

FIT 21 Bill

• The purpose of the FIT 21 Act is to provide a regulatory framework that covers both the CFTC and the SEC, depending on the type of digital asset.
• The bill received 279 votes in the House, indicating solid bipartisan support, including 71 votes from Democrats.
• Ripley expressed optimism about the bill’s potential to bring about positive change in the regulatory environment.

The position of the Executive Branch on cryptocurrencies

• Kraken’s CEO said that the executive branch, mainly through the SEC, has been largely negative towards cryptocurrencies.
• Ripley noted a recent shift in which the Biden administration has shown a willingness to work with the industry and Congress to develop new regulations.
• He mentioned ongoing dialogue with supporters in Congress and the Senate.

Misconceptions and challenges

• The interview raised the Biden administration’s concerns about the use of cryptocurrencies for money laundering and ransomware.
• Ripley argued that these concerns are not the main issues, highlighting the adoption of stablecoins and their role in the global promotion of the US dollar.
• He noted Kraken’s compliance with anti-money laundering regulations.

Policy and regulatory perspectives

• The discussion focused on former President Trump’s recent comments on cryptocurrencies and its potential impact on future regulations.
• Ripley acknowledged that understanding and attitudes towards cryptocurrencies may evolve over time.
• He expressed hope that more politicians would be better informed about the benefits of cryptocurrencies.

The future of Kraken

• Ripley mentioned the possibility of a Kraken IPO in 2025, depending on market conditions and regulatory developments.
• The company is considering another round of financing ahead of a potential public offering.
• He emphasized the importance of adapting regulations for the future development of the cryptocurrency industry.