Dave Ripley, at present the crypto alternate’s COO and named to exchange CEO Jesse Powell when he steps down, informed CoinDesk TV’s “First Mover” that Kraken is a supporter of self-custody.
Requested how his centralized alternate (CEX) could possibly be trusted after the implosion of rival alternate FTX, he responded:
“One of many issues that’s actually crucial to this technique is that it’s the solely place on the planet the place you’ll be able to truly take management [and] personal possession of your individual property in a digital format.”
Nonetheless, “it’s not straightforward” to take care of consumer belief regardless of the alternate’s guardrails, in line with Ripley. He stated FTX’s misuse of buyer funds will solely put extra emphasis on the necessity for proof of reserves.
“People are going to ask for proof versus simply blind belief in centralized third events,” Ripley stated.
Proof of reserves is an auditing approach to substantiate whether or not property are, in reality, obtainable. Ripley stated Kraken has undergone two proof of reserves this 12 months, with one other deliberate for the beginning of the brand new 12 months.
Ripley stated the connection between centralized platforms and regulators may change due to FTX, however that’s “but to be seen.” He stated FTX founder Sam Bankman-Fried’s shut ties with regulators has been “detrimental to decentralized finance [DeFi] and the beliefs of cryptocurrency.”
Regulation may present some runway for CEXs like Kraken, in line with Ripley, however that may rely on a “considerate” strategy sooner or later.
Ripley stated a variety of federal regulators may play a job in creating higher regulatory requirements together with the Securities and Change Fee and the Workplace of the Comptroller of the Forex. Nevertheless, he hinted that maybe the Commodity Futures Buying and selling Fee (CFTC) must be taking the lead.