Bitcoin Forum

If Kraken gets hacked, is your investment protected by government regulation? If so which one?

First of all this is not right place for discussion about this issue please move this thread to right place here https://bitcointalk.org/index.php?board=223.0 second no bitcoin exchange is Government backed if its going to hacked then no guarantee that government is going to give back your money

No, Kraken is running an illegal business. They are not registered as MSB.  Avoid websites like Kraken, BTC-e, Bitfinex and similar others.

Use only financial licensed exchangers because they are insured ! :)

As far as I know, Kraken has all the necessary licenses to run its operations in the United States. But I don't believe that the deposits are insured. This means that if someone hacks Kraken and steals all the coins, then the users will have to bear the loss. No one is going to refund them, either fully or partially.

from where you know that Kraken has the "necessary licenses to run its operations in the United States" ? can you show some proves?

Kraken doesn't have any license, it is not registered as MSB in any state. they are running an illegal money transmitter business for which, many people are in prison now....

Are you serious?  How do you find a "financial licensed exchanger"?   Seems like they're all crooks, you pick one with least complaints and hope you get lucky.  Look for bad press here and use bbb.org.

How come Kraken is still there and nobody is in prison, then ? I really don't understand the idea of linking having a "license" and being trusted. Fully licensed US banks have literally crashed the economy of the whole fucking planet !

they will be. many exchangers were and are in prison because of that. read the news, make a search and you will see... :)

also, visit the Kraken website and see if they have any license(MSB). Then, visit one of these website : Bitstamp, Coinbase, Itbit, Cirle, Gemini and see what you can find.... make the difference :)


if you don't trust the banks, why do you use them? cancel all your bank accounts and live with cash or....BTC if you trust it so much. ::)

the answer is simple : make a search and you will find few.

Bitstamp, Coinbase, Circle,Itbit, Gemini

Using something and trusting it are not necessarily the same thing. I use banks because I have no choice, in my country you can't live without a bank account, companies will not hire you, they want to pay your salary by bank transfer. Same to pay taxes, you need a bank account. The state will force a bank to open you an account even if no bank wants to do it.

If an exchange gets attacked, is the USD in your account any safer than the BTC do you think?

If we're talking about an attack by hackers then yes. To store money you need to use bank accounts, and bank accounts are protected. If the exchange assets are seized by a government, that's another story.

Kraken is not licensed. it's running an illegal exchange service. :)  it's plain simple.  yes, they may offer good services or they may be good guys but the facts are like what I am saying, they are out of law. their company is registered in USA and according to FINCEN, any kind of "exchanger" MUST be MSB. Kraken is not...

See, Itbit, Gemini, Coinbase. They are registered as MSB, they have a financial license. It is not fair for ones to comply with the laws, to pay a lot of taxes, bonds, etc and others to do the exactly same business without any investment and responsibility.

You sound like a broken disk. My answer above asking why Kraken is still open is still valid. They're not hiding, they're not on the dark web, how come authorities haven't closed them if they're doing something illegal ?

because the authorities are moving slowly but the end for Kraken will be the same like many others. i think you have a brain to put questions. why does Coinbase, Gemini, Itbit need to be MSB and Kraken doesn't even it is in USA?  ;D

Also, why doesn't Dargo(Kraken employee) respond about that?

It's not only Kraken. There are many other US exchangers who are facing the same "destiny" :)

https://blog.identitymindglobal.com/bitcoin-crime-punishment

Lol ::) and you have absolutely no agenda here right? You sure seem to hate Kraken for some reason. What could it be? Would you care to enlighten us?

'
it's not about hate for Kraken  ;D ;D ;D

Poloniex is in the same position.

it's all about being fair. few companies invested A LOT to comply with the law, being MSB(financial licensed) and others are running illegal businesses. That's why BTC has a bad reputation everywhere and that's why the banks are closing the users accounts. 

a regulated market (by having regulated exchangers) will bring a lot of investors.

Ok, I got the actual deal from Kraken (you can email them).

They ARE a registered MSB.

However they AREN'T insured, either for fiat or BTC.

I understand that insurance for BTC might not be easy, but it's seriously lame that there's no insurance for USD stored - it can't be that hard. Anyone who is thinking about opening up a competing exchange in the US, you should do it because that is a dealbreaker (and insure for USD obviously).

could you please share with us where they are registered as MSB? what state(s)? :)

Just email them directly, don't take my word for it. I'm guessing all states

it's a fake information. Kraken is not registered as MSB in any state.

Oh really?
Put in kraken into DBA name and see what is going to show up
https://www.fincen.gov/msb-registrant-search

I keep saying that by registering with FINCEN, it does NOT mean that a company is a MSB.

"Information contained on this site has been provided by the MSB registrant. FinCEN does not verify information submitted by the MSB. Information provided on this site reflects only what was provided directly to FinCEN."

You can register on FINCEN website yourself... right now with any name you want. :)  make a try.


So, being registered with FINCEN means nothing. First a company MUST be a MSB and then to submit on Fincen.

A US company must be registered as MSB in all the states if they want to deal in all of them. See Coinbase, Gemini, Itbit, Circle. Look to their websites. You will notice something like :

https://www.coinbase.com/legal/licenses

https://gemini.com/about/


See? BIG difference between Kraken and these ones :)

Again, being registered on FINCEN page without being MSB = zero (outlaw, illegal)

Please show me on Kraken website(or ask them via email, phone) where they are registered as MSB

In my opinion - you got it backward.
You become MSB just by providing some types of services. Indeed, in some states you should apply for a license (but it depends on type of operations - if you check coinbase licenses - none of them were issued to conduct crypto-related operations)
So if you provide certain services - you should register with FinCen. Check out bitstamp - they are licensed in EU, registered in FinCen, but I could not find any state licenses.

Kraken provides the types of services which require to be MSB and FINCEN registration (but only in this order)

Coinbase is registered as MSB in almost all the states and this gives them the right to do many other operations not only dealing with virtual currencies. Except NY, no other state have a special license for Bitcoin (Coinbase have that special license too).

crypto-related operations= virtual currency. MSB law is referring to the virtual currency not to cryptoshit or any other name. :)

Each money services business (MSB) must register with the Department of the Treasury (FINCEN).  Note that failure to register when required to do so or obtain necessary state licensed, can lead to jail time

Most states require money services businesses operating within their territory to be licensed with the state banking department.  Note that many states also require registration of foreign MSBs that transact with their residents.  For example, money transmitters with no physical presence in Texas that transact with residents of Texas must be licensed in the State of Texas; same with all the other states.

FiNCEN describes very well the exchangers status for so called decentralized virtual currencies.

" a person is an exchanger and a money transmitter if the person accepts such de-centralized convertible virtual currency from one person and transmits it to another person as part of the acceptance and transfer of currency, funds, or other value that substitutes for currency."

https://www.fincen.gov/resources/statutes-regulations/guidance/application-fincens-regulations-persons-administering

So, the point that many people are sustaining (without knowledge about the law) that Kraken is registered with FINCEN and it's enough, it's sci-fi, bullshit, etc  :)

 of course, there are many other exchangers like Kraken.   :)

So, you can be MSB without a license in some states, huh?

being registered as MSB = financial license

Can you provide a legal information about this?

Btw:

If you are not using a legal, registered business then you are handing your money over to criminals plane and simple. If you think that's a good financial decision... then best of luck. The moment they get into any kind of trouble they are going to disappear with your btc. You will have no legal recourse, no legal standing; you may even be considered an accessory to their crimes. At that point you will have more than your financial loss to worry about.


EDIT: well, surprise surprise.
https://bitcointalk.org/index.php?topic=2047405.0;topicseen

yes, i warned for SO many times about these exchangers, including BTC-e.   :)

now, it's becoming reality :)

the next ones will be Poloniex, Bitfinex, Kraken.

The thing about Kraken in particular though is that the founder is already mega-wealthy, it's not in his best interests for it to go down in unpleasant manner because of assassination risks. Everyone knows who Jesse Powell is. If he has enough of it, he will need to wind it down slowly.

I'm sorry but with that kind of thinking, forget cryptocurrencies. States don't have any interest in promoting cyrptocurrencies, lest of which the United States which derives most of its global power from printing its own globally accepted currency. The more cryptos are a threat to that, the more they will crackdown on it.

If I had serious crypto money, the US is the last country on Earth I would live in !

https://www.justice.gov/usao-ndca/press-release/file/984661/download
Check allegation number 6.

Allegation 6 talks about being licensed, it also talks about AML. Kraken has KYC rules, but how can any exchange have effective measures against money laundering ? It's impossible. Banks' answer is simply to allow authorities to get their data, freeze accounts etc., do "licensed" exchanges do this, and who's to say that would really satisfy authorities hell bent on killing cryptocurrencies ?

Nobody is safe.

check count 1.  : Operation of an unlicensed Money Service.
allegation number 6 is referring to the fact that BTC-e had no AML process in place. it's something extra :)