Law Enforcement Inquiries Tripled for the U.S Based Crypto Exchange

Kraken, a U.S based cryptocurrency exchange has published its 2018 ‘Transparency report’ prepared by the company’s Compliance team on January 05. The company released an infographic revealing the overall number of law enforcement requests it had received all these years (2015 – 2018).

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As per Kraken’s infographic, the number of subpoenas (a legal document to attend a court) received in 2018 (475) is almost 300% higher than that in 2017 (160). The number of subpoenas also highlights that up to what extent a burden complying with American demands are.

Kraken, which also operates in Canada, Europe, and Japan, reportedly received 315 subpoenas from US law enforcement agencies, including the FBI, HSI, IRS, SEC, and other government bodies according to the company’s report.

The infographic also reveals that the majority of the Law Enforcement requests are within the US with 315 requests. Second is the UK with 61 requests, followed by Germany with 34 and France with 20.

Kraken has a sizable American user base which accounts for 20 percent of all crypto exchange firm customers. The exchange blames legal compliance expenses for being one of the major reason behind businesses deciding to block US users.

Kraken Exchange’s tweet read –

“Peek at our Compliance team’s 2018 Transparency Report. You can see why many businesses choose to block US users. Cost of handling subpoenas (regardless of licenses) is quickly becoming a barrier to entry. Inquiries up 3x YoY.”

The crypto exchange firm also shared its opinion on Twitter:

twitter kraken exchange

In December 2018, South Korea’s largest cryptocurrency exchange UPBit was framed by Korean Prosecutors for their involvement in fraudulent transactions.

There has been a notable rise in suspicious transactions from crypto exchanges. Last year, the crypto market was not only down but also had raised many questions on fraudulent transactions and Anti Money Laundering activities.

We can also observe that more countries are adopting strict regulations on cryptocurrencies and the exchange firms. The regulations can help bring down the fraudulent activities involved with the transactions of digital coins.

What are your thoughts on the increasing number of subpoenas issued against Kraken? Share your thoughts in the comment.