"Our regulatory system allows bad actors to grow and thrive," lashes out the founder of Kraken in his confrontation with the SEC

  Powell asserts that the collapse of "bad actors" in the cryptocurrency market "serves his agenda" against them.

The regulatory action by the Securities and Exchange Commission (SEC) against cryptocurrencies continues to generate debate. Jesse Powell, co-founder of Kraken and still CEO of the exchange, has strongly criticized the stance of the US regulator and stated that they are on the side of the "bad actors" in the industry.

"I have a theory. Regulators let the bad actors get big and explode because it serves their agenda: destroy capital/resources in the crypto ecosystem; burn people and discourage adoption; and provide air cover to attack the good actors. In reality, the bad guys are on their side. The good ones are the enemy," he explained in a Twitter thread.

If the bad guys can run long enough without blowing up, they might just kill the good guys for you.

Bad guys operate with huge competitive advantages. They suck up users, revenue and venture capital that would otherwise have gone to good guys.

BG can always be jailed later.

— Jesse Powell (@jespow) February 19, 2023

It's worth noting that Kraken was fined $30 million by the SEC for its 'staking' services, which have been prohibited in the United States. The decision has been criticized by many industry players, who accuse the commission of being too harsh instead of promoting greater regulation of the cryptocurrency space.

Furthermore, Powell's accusations come shortly after Binance announced that it is willing to reach an economic settlement with regulators to settle investigations into its alleged regulatory violations. In recent months, the world's largest exchange has been in the news for being investigated for alleged money laundering in the United States and for appearing in the case against the now-defunct exchange Bitzlato, which was at the center of a cryptocurrency money laundering network.

Additionally, Powell is not the only industry figure who has strongly criticized the SEC and other regulators. Recently, Cameron Winklevoss, co-founder and CEO of Gemini, has pointed out that governments that do not offer "clear rules and sincere guidance" will quickly be left behind in the adoption race.

"This will mean missing out on the biggest growth period since the emergence of commercial Internet. And it will mean missing out on the opportunity to shape and be a fundamental part of the future financial infrastructure of this world (and beyond)," he added.