Cryptocurrency exchange Kraken has published a lengthy blogpost explaining its position on regulation. Last week New York state Attorney General Eric Schneiderman announced that he had sent letters and questionnaires to leading exchanges, including Kraken, looking for assurances on the quality of their controls and customer protection. Kraken CEO Jesse Powell refused to cooperate, saying that “this kind of abuse” was “not OK”.

Yesterday’s statement makes clearer the exchange’s position on the New York State’s “Virtual Markets Integrity initiative” and its questionnaire. Included in the statement is a list of things Kraken believes that traders care about, and a list of things that they don’t.

According to Kraken, traders are primarily interested that an exchange works quickly and does not suffer downtime. They also want security and privacy, including a “minimal document requirement for on boarding”.

However, Kraken suggest that traders simply do not care about many of the things that concern regulators, including regulatory approval, “being protected from making risky investments” and, most controversially, “being protected from market manipulation”.

This last has caused raised-eyebrows as though traders may not care about a regulator’s opinion, they do care that markets are run fairly. The view that traders are fine with other players manipulating the market has dampened some of the enthusiasm for what had largely been seen as a principled stand by the San Francisco exchange.

Crypto-commentator Nic Carter pointed out that “this might backfire”, while CryptoRae insisted that traders “do care about market manipulation”:

Andreas T. went further, labelling Kraken’s response “idiotic”.  

Kraken no longer operates in New York State due to the regulatory overheads. As such it believes there is no need to cooperate with the investigation.

To be fair, we would have given the same response to the AG [attorney general] of North Korea”, they said.

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