Major Crypto Exchanges Kraken, BitMEX, and Binance Facing Shutdown According to New Report
Major cryptocurrency exchanges like Kraken, BitMEX, and Binance are all facing shutdowns, according to a new report posted online earlier today.
“Coming exchange shutdowns” could affect Kraken, BitMEX, and Binance “as CFTC and SEC design regulatory actions”, writes Rogue Trader at The ICO Journal in a post from earlier today.
The ICO Journal cites a number of sources from across the industry as proof that these major cryptocurrency exchanges could be shut down in the near future.
Speculation has heated up this past week after the shutdown of 1Broker. On Thursday, the FBI seized 1Broker.com for violating a number of US laws and regulations. The exchange is facing a number of charges from the SEC, the CFTC, and the FBI.
The shutdown of 1Broker has sent a signal to the industry: US regulators will not stand quietly by as American investors become victims. 1Broker is based in the Marshall Islands and allegedly allows US investors to trade on the platform. Although it’s not based in the United States, the exchange was still able to be shutdown by US regulatory authorities for violating US law.
Now, some believe that Kraken, Binance, and BitMEX could be next.
The ICO Journal claims to have had “extensive conversations” with sources from across the crypto ecosystem. Take these sources with a grain of salt: The ICO Journal has developed a reputation for apparently fabricating sources. They always seem to have the ideal source at the right time to support a developing story in the crypto community.
“Several sources from the AML/CFT, SEC, crypto hedge funds, and crypto Illuminati have given us thoughts and opinions on where this roadmap could lead and who could be next.”
1Broker was the first to feel the heat of an investigation from US regulatory authorities. However, some believe US regulators specifically targeted 1Broker because it was a “low hanging fruit” blatantly violating serious US laws. US regulators may have targeted 1Broker to send a signal to bigger players like Binance that regulatory violations will not be tolerated.
In any case, here’s what The ICO Journal’s sources had to say about the topic.
Former AML/CTF Enforcement Agent Claims “Geography Is Not A Factor” For The SEC
One source from The ICO Journal has a background in anti-money laundering (AML) and counter-terrorist financing (CTF). That source claims that “geography is not a factor” for US regulators:
“There will be more actions taken. That much I am certain about. Geography is not a factor as they formulate any strategy and are having back-channel conversations. One important point to make here, sticking your thumb up the nose of the SEC over the past six months, or any other regulatory agency, has been noticed and cataloged. It is incredibly stupid to basically dare a federal or state organization to come after you. Which led our conversation to Kraken and the dialogue there CEO decided to air in public. They are firmly in the crosshairs here.”
SEC “Source” Confirms The Agency Is Evaluating Other Exchanges
The ICO Journal also claims to have an inside source at the SEC. That inside source had the following to say about the seizure of 1Broker:
“The 1Broker action was appropriate and serious. Treated as such by 1Broker and its locality. We are carefully evaluating other crypto exchanges and their policies and consumer protection policies and actions. That is an important distinction. We are interested in both what an exchange prints and what it actually does.”
“I Expect Kraken And Binance” To Be Targeted “At Some Point”
The ICO Journal also claims to have spoken to “a crypto Twitter voice” who has been involved in the space since 2012. That voice claims that Kraken and Binance are expected to be next on the SEC’s radar. Both exchanges have allegedly violated US laws and regulations over the past few months:
“I expect Kraken and Binance to be the headliners to get punk’d at some point. How, when, or for what is anybody’s guess at the moment. But one of them has actively antagonized regulators (Kraken) and the other has played all sorts of legal and geographic games specific to avoiding regulators (Binance). Should the SEC begin to really get frisky and take on Binance that would be serious and cause some price destruction. Were I to offer a guess, I think Kraken gets slapped and Binance finds a way to avoid *public* enforcement. I could see a way that a backroom conversation occurs and Binance is given a ‘deal they can’t refuse’ to clean some things up.”
Kraken has antagonized regulators by making bizarre statements on social media. Last week, Kraken’s co-founder issued a series of tweets comparing American regulatory authorities to a crazy ex-girlfriend. Kraken was specifically responding to a report by the New York Office of the Attorney General that found various cryptocurrency exchanges – including Kraken – could be violating New York regulatory law.
Conclusion: Which Exchanges Will Fall Next?
1Broker is one of dozens of exchanges that could be violating US regulatory law. The problem here is that many exchanges claim to not accept American users officially. However, American users are free to sign up, and exchanges happily turn a blind eye to the practice because they make money from American traders.
Take The ICO Journal’s sources with a grain of salt: the internet is growing increasingly skeptical of The ICO Journal and its mysteriously convenient sources. Nevertheless, it’s certainly possible that Binance and Kraken could be the target of future regulatory action.