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Reports: Crypto Exchange Kraken to Plan Private Offering After ‘$4 Billion’ Valuation

Kraken is said to be gauging interest from select investors for a minimum $100,000 investment per head.

United States cryptocurrency exchange Kraken is considering a private offering to high net worth investors, Finance Magnates reported Dec. 12, quoting emails sent by the company.

Kraken, which is currently the subject of a lawsuit over its support of the competing forks of altcoin Bitcoin Cash (BCH), has reportedly valued its shares at $4 billion.

According to Finance Magnates, executives are now offering select major clients to whom the email was sent a chance to acquire further equity, subject to a minimum investment of $100,000.

“The transaction process will be done by a 3rd party service, who will run accredited investor checks, facilitate the execution of transaction documents, and the funding of your investment,” the email reportedly states.

Those involved have until Dec. 16 to signal their interest, and will undergo vetting for eligibility prior to participating, Finance Magnates added.

Kraken had not responded to a request for comment by Cointelegraph at press time.

Last month, fellow exchange Coinbase informally ruled out holding an Initial Public Offering (IPO) after it was valued at $8 billion.

Kraken has sought to upend ongoing regulatory demands in the U.S. in recent months, being one of just four exchanges to reject a request for information from New York authorities in September as part of their crypto exchange inquiry.

The current Bitcoin Cash lawsuit focuses on alleged collusion to manipulate control of the altcoin and “centralize its network” following the contentious hard fork on Nov. 15.

The fallout from the event continues, with rival factions laying blame on each other for various problems. Bitcoin.com CEO Roger Ver and Bitmain co-founder Jihan Wu are also named in the lawsuit.

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Bitmain, Roger Ver, Kraken Sued for Alleged Bitcoin Cash Hard Fork Manipulation

Florida-based UnitedCorp has launched a suit against Roger Ver and some other major industry players for allegedly planning a scheme to take control of the BCH network.

Florida-based United American Corp. (UnitedCorp) has purportedly filed a lawsuit against Bitmain, Bitcoin.com, Roger Ver, and the Kraken Bitcoin Exchange, according to a press release published Dec. 6. UnitedCorp alleges that the defendants planned a scheme to take control of the Bitcoin Cash (BCH) network.

Founded in 1992, UnitedCorp is a development and management firm with a focus on telecommunications and information technologies. The company manages a portfolio of patents and proprietary technology in telecoms, social media and blockchain. UnitedCorp also owns and operates BlockchainDomes stations, that provide heat for agricultural applications.

The suit filed in the U.S. District Court for the Southern District of Florida alleges that the defendants jointly used unfair methods and practices to manipulate the BCH network for their benefit and detriment of UnitedCorp and other BCH stakeholders. The release further specifies:

“UnitedCorp believes that the defendants colluded to effectively hijack the Bitcoin Cash network after the November 15, 2018 scheduled software update with the intent of centralizing the network — all in violation of the accepted standards and protocols associated with Bitcoin since its inception.”

On Nov. 15, the BCH network underwent an update, which divided the community into two main camps, those who support Bitcoin Cash ABC and those who support Bitcoin Cash SV. UnitedCorp states that the defendants took control of the coin’s network right after the upgrade using “rented hashing.” This allegedly led to the adoption of Bitcoin ABC rule sets, precluding other implantations from maintaining a democratic rule sets.

UnitedCorp also alleges that on Nov. 20 the Bitcoin ABC development team put a “poison pill” into the blockchain by way of a “Deep Reorg Prevention” in order to strengthen control over the blockchain ledger. That allegedly enables maintenance of control on implementations for future network updates.

The suit seeks injunctive relief against the defendants, asking to prevent them from ongoing actions against the BCH network and doing so in the future. Additionally, UnitedCorp seeks compensation, the value of which it claims will be determined at trial.

Bitcoin Cash has registered the major losses on the day. The altcoin is down by over 20 percent over the last 24 hours and is trading at around $103 at press time, according to CoinMarketCap.

Bitcoin SV (BSV), in turn, has seen noteable daily gains of over 27 percent, and is trading at around $112 at press time. BSV’s maximum supply is 21 million, while its market capitalization is around $1.9 billion at press time.

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Kraken: Rumors of Office Closure are False

Kraken, one of the most important exchange houses of the crypto verse, denied yesterday a rumor that was spread within the community of crypto enthusiasts, that it had closed its offices suddenly after a violation of its security, causing alarm among its employees.

cryptocurrency investingThe post published in the subreddit of the Canadian city of Halifax, Nova Scotia, mentioned that the exchange had closed its unit 102 at 60 Highfield park drive. This post received over 300 comments and was shared in several crypto-oriented websites and forums.

A Reddit Post Started It All

According to the original post, the atmosphere was apparently quite hectic, with “private security all over the place escorting people off the premises after making them sign voluntary quit forms.”

Kraken Halifax closes their doors forcing hundreds of people out of work, were you one of them? from halifax

One user, possibly a worker there, commented that the exchange held a “mandatory meeting,” in which they offered an “8 weeks pay as a severance package” for those who resigned before Friday. He mentioned that the company’s directors told them that their continuity of employment was not guaranteed should they not resign:

“10 AM, mandatory meeting. Security everywhere, required to hand in door fobs. Sitting in lunchroom, get told that due to volumes being down (both trading and support ticket), and in light of the opening of a new office in Asia, we need to reduce costs, and layoff of recently hired (<3 months, approx 57 people) was not enough.

We’re told that if we resign by Friday at noon, we’re given 8 weeks pay as a severance package. If we do not accept in time, they tell us that they cannot guarantee our continued employment. Sounds an awful lot like we just got laid off, right?

I can’t (read: don’t want to) talk more about it, but that’s what has been going down.”

Kraken Clarifies

After this momentary alarm, a Twitter user wrote to CBC Nova Scotia’s official account, asking if they had any confirmed information about the rumor or if they had any comments about it. CBC did not have to respond since one of Kraken’s official accounts, @krakensupport clarified that the rumor was false and that the famous exchange was not closing its offices, much less would have suffered some kind of security breach:

Shortly after that, Jesse Powell, Co-founder, and CEO clarified the point regarding personnel cuts. According to his statements, the rumors were exaggerated and out of context as the exchange just laid off about 10% of the Client-Services team as a cost-saving measure.

He further commented that the rest of the staff of other organizational units were not affected and that they were in fact “hiring globally for all functions.”

Kraken: An Exchange With a Successful 2018

During 2018, Kraken has taken several strategic decisions that have allowed it to position itself as an exchange of recognized solidity and stability. At the beginning of the year, the company published the decision to hire more than 800 individuals https://www.businessinsider.com/crypto-exchanges-are-planning-to-hire-more-than-1000-staff-2018-2

So far the exchange trading is ranked 14th. The rumor did not affect the operations within its platform in a significant way. Kraken remains solid with $149.969.379 of 24 hour volume. Its offices in Canada are working normally at the time of this article. The Reddit post is still active, with the post discussing the legality of Kraken’s decision to lead tell its employees they should resign.

The post Kraken: Rumors of Office Closure are False appeared first on Ethereum World News.

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Crypto Exchange Kraken Denies Rumors of Sudden Staff Layoffs in Canada

Crypto exchange Kraken, currently ranked 11th largest globally by daily trade volumes, has denied rumors that it is laying off staff in its unit in Halifax, Canada, Finance Magnates reports September 6.

The denial comes after a post to a local discussion thread on reddit alleged that Kraken’s “unit 102 at 60 Highfield park drive” had laid off “hundreds of people…after making them sign voluntary quit forms,” further claiming that a “giant commotion” had erupted in response to an alleged security breach. After making the claim, the redditor in question asked thread contributors, “was anyone here one of those people?”

Despite the tentative question at the end of the post, some of the details appeared to have been be reinforced by a separate thread contributor, who wrote:

“10 AM, mandatory meeting. Security everywhere, required to hand in door fobs. Sitting in lunchroom, get told that due to volumes being down (both trading and support ticket), and in light of the opening of a new office in Asia, we need to reduce costs, and layoff of recently hired (<3 months, approx 57 people) was not enough.”

The contributor further alleged that meeting attendants had been told that if they would voluntarily resign before this coming “Friday at noon,” they would be given “8 weeks pay as a severance package,” but that if they would fail to do so, they could not be guaranteed further employment. “Sounds an awful lot like we just got laid off, right?,” the post’s author wrote.

Another contributor to the thread suggested that the security alert was due to the location being “compromised,” – i.e. a physical, rather than a network, breach.

Finance Magnates cites Kraken support team’s Twitter denial to a worried inquiry yesterday:

“We can confirm that we are not shutting down any operations in any specific place, and there has been no security breach. Everything is fine & secure. Thank you for your reaching out to us with your question!”

The denial was reaffirmed in a second Tweet from the Kraken support team hours later.

Yesterday’s rumors come roughly six months after a Business Insider report had claimed that a “person familiar with the [Kraken’s] operations” had said the company was “on the fast track to 1,000 employees and [was] prepared to add 800 people to its staff in 2018.”

Nonetheless, this April, Kraken pulled its trading services from Japanese residents, citing rising costs of business as the grounds for its decision.

Last month, data compiled by crypto industry newsletter producer Diar suggested that since the start of 2018, traded volumes on Kraken – alongside U.S.-based exchanges Coinbase and Bitstamp – have seen steep declines, in contrast to the relatively better performance on Asian-based crypto exchanges during the same time frame. Nonetheless, according to Diar, Kraken fared better than both its US competitors.

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Crypto Exchange Kraken Denies Rumor of Office Closure, Security Breach

U.S.-based cryptocurrency exchange Kraken has denied a rumor that has emerged on social media claiming the firm is shutting down operations at one of its service centers amid a security issue.

Reddit user “throwaway34034324” posted a thread on Thursday claiming that the exchange is closing operations in Halifax, Canada, and has “just laid off hundreds of people in response to a security [breach].”

Another user, “MysteriousPlankton,” who is apparently one of the Halifax employees, commented on the thread that they were asked to accept voluntarily resignation with eight weeks’ pay as a “severance package” or risk being laid off.

They added:

“Security everywhere, required to hand in door fobs. Sitting in lunchroom, get told that due to volumes being down (both trading and support ticket), and in light of the opening of a new office in Asia, we need to reduce costs, and layoff of recently hired (<3 months, approx 57 people) was not enough.”

The same user also specified that the staff allegedly impacted from back-office operations, including those conducting know-your-customer/anti-money laundering processes, security and investigations, and deposits and withdrawals processing.

“The layoffs cover just about every aspect of their business,” they stated.

While Kraken has not yet made any official statement to address the issue, its customer support operation replied to at least two enquires on Twitter to deny most of the allegations.

“We can confirm that we are not shutting down any operations in any specific place, and there has been no security breach. Everything is fine & secure,” the exchange said.

At press time, Kraken had not responded to a CoinDesk’s enquiry regarding the alleged staff layoff.

Business Insider reported in February that the San Francisco-based exchange had been planning to increase its total manpower by 800 people in 2018. Yet, as CoinDesk reported in April, Kraken took the decision to cut off its services to Japanese investors “due to the costs and resources required to maintain service in Japan.”

Kraken image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Binance, OKEx Volumes Surge While Coinbase, Kraken See Over 70% Drops

The largest U.S. cryptocurrency exchange Coinbase faces tough competition from Asian competitors Binance and OKEx, data revealed Monday, August 20, as its volumes drop almost 85 percent.

Figures compiled by cryptocurrency industry newsletter producer Diar show that while Coinbase trading has tailed off dramatically since the start of 2018, Binance and OKEx have either seen stable activity or even posted increases.

From January to July, U.S. dollar traded volume at Coinbase slumped 83 percent, while at fellow major platform Bitstamp, the figure hit 73 percent.

At the same time, Binance’s volume increased 21 percent in July versus June, while OKEx post a new record last month.

“Over 50% of traded volumes on cryptocurrency markets revolve around the majors, Bitcoin, Ethereum, XRP, Bitcoin Cash and Litecoin,” the publication wrote in comments on the results.

“However, the market downfall is taking major US exchanges in its wake. Traded volumes on Coinbase, Bitstamp and Kraken have seen steep declines.”

Despite altcoins trending downward in price throughout the year, Binance, which offers a huge number of altcoin trading pairs, appears to have used them to its advantage.

Coinbase is catching up, however, Diar noting its Paradex subsidiary is hosting Binance’s native BNB token, as well as Chinese exchange Huobi’s HT “in an effort to win traders over onto their platform.”

Binance, OKEx and Coinbase are meanwhile all pursuing aggressive international expansion policies, Cointelegraph recently reported.

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Filings Link Crypto Exchange Bitstamp to Game Maker Nexon

Public filings released in late May establish the strongest link yet between Bitstamp and Korean gaming firm Nexon, which was rumored to have bought the cryptocurrency exchange earlier this year.

Those rumors date back to the spring when sources indicated that Nexon would pay as much as $500 million for Bitstamp, one of the industry’s longest-running bitcoin exchanges. Word of the acquisition also came months after Nexon bought a majority stake in crypto exchange Korbit for roughly $80 million in September 2017.

Business Insider later reported in April that Nexon was in talks to acquire Bitstamp for $350 million. Lee Jungheon, CEO of Nexon Korea, said in the wake of that report that “Nexon Korea does not have anything to do with a Bitstamp acquisition” according to the Korea Herald.

But a corporate disclosure submitted by Nexon Group holding company NXC and obtained by CoinDesk suggests that some kind of deal took place. NXC, Nexon Group’s parent company, is 98.28 percent owned by Nexon founder Kim Jung-ju and his family.

According to the report, NXC owns 100 percent of a Belgian company called NXMH B.V.B.A., an investment and consulting firm. NXHM B.V.B.A., with 99 percent ownership, created Bitstamp Holdings N.V., also a Belgian company, on February 1 of this year.

The report states that Bitstamp Holdings N.V. acquired 100 percent of Bitstamp Japan Co., Ltd on April 25.

But while the documents establish a link to Bitstamp, it’s not clear whether they constitute an “acquisition” of Bitstamp given the lack of information regarding Bitstamp Japan Co., Ltd. The exchange is run by Bitstamp Limited, which is based in the United Kingdom and has offices in Luxembourg and New York.

A Nexon representative said that Bitstamp Holdings isn’t the operator of the exchange, and when asked about the relationship there, the rep said that they “cannot disclose any further information at this moment.” Bitstamp did not immediately respond to a request for comment.

Game maker push

If confirmed, the deal would represent the latest industry buy for the gaming company, which has released a number of titles for desktop and mobile platforms.

The purchase of Bitstamp Japan Co., Ltd also followed a record-setting year for Nexon. The company reported more than $2 billion in revenue for 2017, an increase roughly 28 percent over the prior year’s figures.

Nexon isn’t the only gaming company with its eyes on the crypto space, however.

Gumi, a mobile game maker based in Japan, launched a $30 million investment fund earlier this year focused on the tech. And major industry companies like Ubisoft and Unity have also made similar moves in recent months.

Nexon executives have remarked on the technology as well in the past. Back in March, Owen Mahoney, CEO of the Nexon’s U.S. arm, cited blockchain during an interview with CNBC as a tool for improving the gamer experience.

“People want to trust other people within new games, and blockchain technology can help bring that reputation across different sort of games,” he was quoted as saying.

Reporting by Shinjae Yoo and Pete Rizzo.

Image via Glassdoor

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Cryptocurrency Exchange Kraken Lashes Back at Bloomberg over Tether Complaint

KRAKEN, TETHER (USDT)–Popular cryptocurrency exchange Kraken has offered a rebuttal to last week’s scathing article by Bloomberg implicating the trading platform in market manipulation using the controversial stablecoin Tether USDT.

As outlined in a previous article reported on EWN, Bloomberg reviewed 56,000 trades from Kraken’s public ledger between May 1 and June 22 and, in conjunction with NYU Professor Rosa Abrantes-Metz and former Federal Reserve bank examiner Mark Williams, came to the conclusion that Kraken may have been manipulating their marketplace for Tether’s USDT stable cryptocurrency. The pattern was first uncovered by former professional poker player Andrew Rennhack, who was puzzled over the lack of price movement differentiation between small and large Tether orders on the exchange. In effect, massive USDT orders were having little impact on the market price, and having a similar effect as relatively small orders. In addition, the author cites “oddly specific” order sizes that have commonly been associated in the past  with attempts at price manipulation.

In the response, Kraken takes an acerbic stance defending against allegations of market manipulation, implying that the Bloomberg article misunderstood the nature of the cryptomarkets,

“A reporter covering market structure for Bloomberg News inexplicably fails to comprehend basic market concepts such as arbitrage, order books and currency pegs.  More troubling, however, was the applause from other “journalist” lemmings as they followed in walking their reputations off a cliff. It defies logic.”

The article also cites support from the Kraken community in reviewing the the Bloomberg article, chiming in that they too found fault in the original publication’s evidence towards manipulation,

The author of this article is seriously lacking in any understanding of how a market works.  There might be manipulation in USDT but he has not even hinted at any credible proofs for it.  – u/AlpineJoe888

Kraken’s rebuttal hinges on the fact the exchange moves a small volume of Tether relative to the entire marketplace of cryptocurrency, and that the sophistication of arbitrage across exchanges has effectively solidified the pricing of Tether. That, combined with investor expectation that 1 USDT is worth 1 USD keeps the stablecoin’s price stable.

As Kraken argues, the one-sided approach to article writing, particularly by a publication as large as Bloomberg, has potential ramifications for the entire industry of cryptocurrency,

It’s scary to think that our lawmakers are reading this stuff.  The title sure was sensational, and it undoubtedly grabbed eyeballs but what of the readers who are not following the outrage on Reddit and Twitter?  What of those who rely on the journalistic integrity and expertise of their news sources?

When asked by Cointelegraph for a response to Kraken’s rebuttal, Bloomberg had the following to say,


We stand by our reporting.

Given the high profile nature of Tether, from allegations of over-inflated funds, SEC inquiries, and the recently published review by a former FBI director, the stablecoin USDT is creating a great deal of polarity in the industry of cryptocurrency. Tether represents the 10th largest cryptocurrency by market capitalization, contributing 2.7 billion USD (with a 1:1 value of USDT) to the crypto markets. The aforementioned private review has given the industry of cryptocurrency a modicum of relief over the true nature of Tether’s fiat backing, but investors are still waiting for a public audit to take place to give a definitive answer. In the meantime, giving investors broader access to a stable currency on exchanges in the absence of direct fiat pairing has been a welcomed addition, even if it negates the explicit nature of dealing solely in cryptocurrency. 

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Kraken Crypto Exchange, Community Blast Bloomberg Article on Tether ‘Red Flags’

Major crypto exchange Kraken has issued a scathing response to a recent Bloomberg article about stable cryptocurrency Tether (USDT) allegedly “defying logic” on Kraken’s platform.

The article in question, titled “Crypto coin Tether defies logic on Kraken’s market, raising red flags,” was published on Bloomberg June 29, with comments and analysis from several academics and Andrew Rennhack, a former professional poker player.

Its authors allege that the price of Tether might be manipulated on Kraken, citing “oddly specific order sizes” and the fact that “huge trades move prices about the same as small ones.”

According to Bloomberg, the trades that are taking place on Kraken on a daily basis should be significantly influencing the price of USDT. Instead, the price of the cryptocurrency remains relatively stable –– something viewed by “experts on market manipulation” as a “red flag.”

In response, Kraken published a post on its official blog July 1 stating that Bloomberg’s writers “fail to comprehend basic market concepts such as arbitrage, order books and currency pegs.”

Explaining their somewhat harsh statement, Kraken points out several factors that have not been taken into account in Bloomberg’s report. According to the exchange, arbitrage trading, the small USDT trade volume on its market, and the fact that Tether is allegedly backed 1:1 by U.S. dollars are the three key reasons that lead to the trades on the platform barely influencing the token’s price.

Bloomberg’s article also pointed out “oddly specific order sizes,” citing 13,076.389 USDT as the third-most-common trade on Kraken during the period of writing. According to the news outlet, these trades “could be signals to cheaters’ automated trading programs.”

In turn, Kraken claims to have spoken to the trader responsible for these specific orders. Their reported response was “literally randomly selected.”

The exchange was not the only one to be outraged by Bloomberg’s article, as numerous crypto industry commenters have taken their negative reactions to Twitter and other social networks.

One of them was Mike McDonald, another professional poker player, who weighed in:

“As assuredly the most uninformed piece I have ever read on crypto I think it is a valuable lesson to us to see just how low the standard can be to get published by fairly reputable sources. Small picture a waste of time but big picture a good lesson.”

In response to Cointelegraph’s request for comment on Kraken’s response, a Bloomberg spokesperson simply stated:

“We stand by our reporting.”

Cryptocurrency Tether (USDT) has been the subject of prolonged controversy fuelled by doubts about the fact that all USDT tokens are in fact backed by the same amount of U.S. dollars.

Cointelegraph reported June 20 that a law firm working with Tether unofficially confirmed legitimate dollar-backing, but an official, public audit of the company’s financial resources has not yet taken place.

Kraken is currently the 16th largest crypto exchange in the world by daily trade volumes, seeing about $101 million in trades over the past 24 hours to press time, according to data from CoinMarketCap.