KrakenEng

I'm not surprised. I have colleagues who worked there and they have a very toxic work culture.

Kraken's response was

The SEC alleges that Kraken “commingled” its own funds with its clients’. This is a similar allegation already made of other crypto trading platforms. The SEC cannot and does not allege that any customer funds are missing, or any loss has occurred. Nor does it allege that any loss will occur. *The complaint itself concedes that this so-called “commingling” is no more than Kraken spending fees it has already earned.*

https://blog.kraken.com/news/kraken-continues-to-fight-for-i...

Kraken's response: https://blog.kraken.com/news/kraken-continues-to-fight-for-i...

The complaint against Kraken alleges no fraud, no market manipulation, no customer losses due to hacking or compromised security, and no breaches of fiduciary duty. It includes big dollar amounts but does not allege a single one of those dollars is missing or misused – no ponzi scheme, no failure to maintain adequate reserves, and no failure to preserve the identity of client funds 1:1. Indeed, none of these things would be true.

Instead, the complaint makes a technical argument: that Kraken’s business requires special securities licenses to operate because the digital assets we support are really “investment contracts.” This is incorrect as a matter of law, false as a matter of fact, and disastrous as a matter of policy.

...

The SEC already tried this theory and a court rejected it outright. The SEC argued in that case that digital assets bought and sold on trading platforms were really securities transactions. The Federal Court for the Southern District of New York disagreed, ruling that the SEC failed entirely to satisfy the relevant legal test. The court held that the SEC’s unprecedented legal theory was contrary to the “economic reality” of such transactions. The SEC’s case against Kraken will fail, too, and for the same reasons.

The SEC alleges that Kraken “commingled” its own funds with its clients’. This is a similar allegation already made of other crypto trading platforms. The SEC cannot and does not allege that any customer funds are missing, or any loss has occurred. Nor does it allege that any loss will occur. The complaint itself concedes that this so-called “commingling” is no more than Kraken spending fees it has already earned.

The SEC famously argues that digital asset trading platforms like Kraken can simply “come in and register” with the agency. As most securities law experts know, there is not a single law on the books supporting this position. The SEC has promulgated no rule describing how an order in a digital asset should be matched, no guidance on how a trade should be cleared, and articulated no standards for how to broker a digital asset transaction. The allegation is hollow; there is no such thing as an exchange, broker dealer, or clearing agency for investment contracts. The SEC is demanding compliance with a regime that doesn’t exist.

Every other exchange that played by the rules and missed out on becoming the #1 exchange. It is easy to win when you cheat.

Employees got 14 weeks severance. They didn't have to do that.

1) The anonymous/pseudo anonymous nature of the space is bizarre. I would have multiple voice-only meetings with people using aliases and avatars for all communications. To this day I only know some people as "Mango Man" or whatever. Meeting people who could just burn down an entire identity and start fresh when things go sideways is an indicator of the nature of the space.

Most employees at Kraken don't know what the CTO looks like. He never turns the camera on during meetings and as far as I'm aware hasn't showed up to the in person events. He wrote most of the legacy backend.

This was mostly a curiosity though. None of the other points apply to him. He was professional.

6) VC in the space is even more wild than what has been reported in the media. I'll just leave this one at that.

I know a guy who went to a crypto hackathon (which is a chance for devs and start ups to show off for VCs.). He said a disturbing number of VCs, mostly creepy old guys who got rich off crypto, showed up with obvious asian/eastern European prostitutes or sugar babies.

Binance can create its own volume out of thin air. This would be harder for Coinbase, due to their nature as a public company. The truth is, it's hard to know what is happening inside Binance.

Exchanges aren't banks and shouldn't act like banks. Banks are allowed to take deposits and lend then out, ie they don't need 100% reserves. Exchanges should be required to hold at least 100% reserves.

FTX collapsed, in part, because they weren't maintaining reserves. Instead they gambled with customer money.

their unrestricted ability to mint stable coins and use them to manipulate the market as they see fit

What stable coins do Coinbase or Kraken mint?

This wasn't just a cut to sales or support staff. 30% of engineering was layed off. I would say QA/QE was decimated, but I'm not sure if anyone was left.

30% of Eng was cut. Multiple engineers on my team were cut. The QA team was basically wiped out. As far as I can tell, all the lawyers are still here.

A large chunk of the 3400 employees are not eng or the like. Most of these people are customer support or customer support adjacent (eg compliance). In this way, Kraken is a little bit different from most other tech companies.

This is exactly how I feel. I was heads down getting my work done, when suddenly the CEO plunges the entire company headlong into the culture war. It is counterproductive and bad leadership.