Jesse Powell, founder and CEO of popular cryptocurrency exchange Kraken, recently stated potential cryptocurrency investors should look after themselves. The chief executive argued traders tempted to get in on the cryptocurrency markets should carry the burden of responsibility.
While speaking at the World Government Summit in Dubai, Powell further revealed his San Francisco-based exchange conducts a “thorough” evaluation process on the currencies it lists. This, to ensure every cryptocurrency on it isn’t a scam.
He noted that Kraken doesn’t make any promises about the future of a cryptocurrency, as “things can change when you raise $1 billion in 10 minutes.” Presumably, Powell was hinting at potential exit scams, such as those we recently saw.
As covered by Core Media, a cryptocurrency startup recently vanished after raising $4.5 million. The company, LoopX, was supposedly a sketchy investment platform. Earlier this year, Lithuania-based startup Prodeum also pulled an exit scam, leaving investors with a blank page that read “penis.”
Speaking to CNBC, the CEO added:
“I think ultimately consumers need to look out for themselves, look into the fundamentals of any coin and not rely on any particular exchange to protect them from market volatility.”
Kraken CEO’s advice comes during critical times
Powell’s comments come at a critical time, in which critics and regulators weigh in on the crypto space. Last year, JP Morgan’s Jamie Dimon notably said bitcoin was a “fraud,” and then took back his comment, while billionaire Warren Buffet bashed cryptocurrency before admitting he knows nothing about them.
The Nigerian Senate recently warned against cryptocurrencies as the country’s central bank was reportedly not doing enough to educate its citizens on the potential risks. Christine Lagarde, head of the International Monetary Fund (IMF) recently stated cryptocurrency regulations are “inevitable.”
Last year Kraken struggled with the number of new users coming in. So much so it went down for 48 hours during system maintenance. At the time, users were quick to voice their concerns on social media, which forced the exchange to keep updating them.
The market is still trying to recover from a steep correction endured earlier this year. At press time, Bitcoin is trading at $8,590, down from a $19,000 all-time high in December.