According to Kraken’s chief legal officer, Marco Santori, the exchange carries out several compliance, cybersecurity, and legal reviews on all crypto assets before listing them for trading.
New interview with Real Vision Crypto
Santori further revealed in an interview with Real Vision Crypto that among the thousands of crypto assets available, Kraken only supports a select few.
He said that they use various methods to determine whether to pursue a new asset. The first is the business case, which involves assessing user interest.
This is the primary factor in deciding whether to move forward. If there is sufficient interest, we conduct a thorough compliance review to ensure the asset adheres to sanctions laws and does not involve politically exposed persons.
He also stated the fact that they also evaluate the asset’s cybersecurity measures to ensure it meets our standards for functioning on a network.
The firm does not support tokens that would not meet its own implementation standards. Finally, the asset undergoes legal review before they make a decision.
One of the steps of that legal review is ensuring that the token is not a security, according to Santori.
Kraken vs. the IRS
Recent reports indicate that the IRS is seeking information about specific Kraken users as part of a tax inquiry. The crypto exchange is refusing to comply with the extent of the request.
According to Blockworks, this legal dispute is uncharted territory.
Miles Fuller, a former IRS senior counsel who now leads government solutions at TaxBit, stated that the IRS’ lawsuit against Kraken provides a significant legal examination of the language added by Congress in 2019 to the IRS’ use of John Doe summonses.
The same online publication explained that the Taxpayer First Act — passed that year — requires the IRS to “narrowly tailor” such summonses to only include requests for information pertaining to tax compliance or non-compliance.