Increased interest from crypto exchange authorities

The Kraken crypto exchange recently published its activity report for the year 2019. It shows an increase of almost 50% of the requests for information about clients from the authorities. In addition, the exchange revealed that it also registered a number of problems in the relationship with banks.

Kraken is one of the largest exchanges in the market, very popular in Romania. It is ranked 3rd in the top Coingecko.

Increased interest on the part of the authorities

Kraken observed a 49% increase in requests for information from the authorities (710 compared to 475). 61% came from the US authorities, followed by the UK and the Netherlands. The figure is interesting given that only 40% of Kraken customers are American.

That time again. Here’s a snapshot of our Compliance team’s 2019 Transparency Report. Team America is still ahead with 61% of total requests, down from 66% last year. Other geos gaining fast. Trend is obvious. Costs are increasing, even in a relatively flat market. pic.twitter.com/4AMe11unoL

– Kraken Exchange (@krakenfx) January 7, 2020

Kraken CEO Jesse Powell said the exchange spent $ 1 million to handle such requests last year. Even with a dedicated compliance team, a huge effort was made to assess the legitimacy of the requests and to investigate those clients.

The report shows that 28% of applications in 2019 were rejected as “illegal”, but it requires efforts from the company anyway.

The increase of interest from the authorities is due to the fact that, as the popularity of cryptocurrencies increased, illegal activities also increased. In addition, new KYC / AML obligations have been implemented internationally.

Problems with banks

Kraken is one of the most liquid crypto exchange platforms, offering fiat ramps and crypto-to-crypto transactions. However, the company faced difficulties in working with banks.
A number of banks have decided to decline transactions with cryptocurrencies, including through Revolut. Kraken has tried to remedy this through a partnership with Silvergate Bank.

In addition, the company Kraken warned that it would report any suspicious withdrawal to German banks, because of previous reports of financial crimes. Starting December 13, 2019, withdrawals to Frick Bank accounts are not allowed.