In today’s edition of The Daily, we feature a couple of stories that show how the U.S. is potentially stifling the development of the local cryptocurrency industry by burdening companies with costly compliance. We also cover a partnership between a computer chip manufacturer and a crypto studio.
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US Authorities Issue Majority of Subpoenas to Kraken
The popular cryptocurrency exchange Kraken has released statistics about the volumes and global breakdown of its information requests from authorities during 2018. The data shows that the number of subpoenas has almost tripled from just 160 in 2017 to 475. The numbers also highlight how much of a burden complying with American demands actually is.
While the exchange reports that just about 20 percent of its clients come from the U.S., the country represented the absolute majority of requests for information it had to handle from all over the world. Following the United States’ 315 subpoenas in 2018 was the U.K. with just 61. In fact, the FBI alone issued more requests than all U.K. authorities, a total of 67. Homeland Security Investigations (HSI) was even more of a burden on the exchange with 91 information requests.
Jessie Powell, the outspoken CEO of Kraken, commented: “On the one hand, we are happy to assist to the extent legally possible in the capture and prosecution of violent criminals and thieves. On the other hand, nobody likes having a gun to their head, being forced to divert labor from one’s own objectives to somebody else’s.”
“Peek at our Compliance team’s 2018 Transparency Report. You can see why many businesses choose to block US users,” stated the Kraken team. “Cost of handling subpoenas (regardless of licenses) is quickly becoming a barrier to entry.”
“Part of why these are so taxing is that they often require a significant amount of education and back-and-forth. We’ll get requests for ‘all transactions’, which could be petabytes of data when they actually only need the withdrawals from last week for one guy,” they further explained.
Exchange Receives Flak for Kissing Up to Regulators
New York-based trading platform Gemini has launched a controversial marketing campaign across NYC. Ads posted on outdoor billboards, subway stations and taxis by the exchange are proclaiming that “The Revolution Needs Rules” and “Crypto Without Chaos” suggesting that government regulations are good for investors.
These messages that can also be seen as an attack on trading venues that can’t afford to acquire a costly “Bitlicense” have, not surprisingly, caused an uproar by the more libertarian sections of the cryptocurrency community. Some people have taken issue not just with the idea of the campaign but that such ads might encourage regulators to think that the community is actually grateful for their often heavy-handed actions.
“We believe that investors coming into cryptocurrency deserve the exact same protections as investors in more traditional markets, adhering to the same standards, practices, regulations and compliance protocols,” Chris Roan, head of marketing at Gemini reportedly told the WJS.
AMD Partners With Crypto Development Studio
Consensys, the crypto software studio that was reported to cut over half of its employees last month, has teamed up with one of the companies that suffered most from the decline in the sale of GPUs to cryptocurrency miners last year – AMD.
The two sides have announced that, in collaboration with Abu Dhabi-based Halo Holdings, they will develop optimized data-center solutions for emerging blockchain workloads through the creation of W3bcloud. The initiative is focused on providing an independent cloud computing blockchain infrastructure and plans to develop optimized solutions powered by AMD hardware.
“Bolstering the compute power of blockchain networks with AMD’s leading-edge technology will be of great benefit to the scalable adoption of emerging decentralized systems around the globe,” said Joe Lubin, founder of Consensys and co-creator of Ethereum. “The combination of hardware and software will power a new infrastructure layer and enable an accelerated proliferation of blockchain technologies.”
What do you think about today’s news tidbits? Share your thoughts in the comments section below.
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