San Francisco-based cryptocurrency exchange, Kraken, gave a quick glimpse into its annual transparency report for 2018. “You can see why many businesses choose to block US users,” the company insisted. “Cost of handling subpoenas (regardless of licenses) is quickly becoming a barrier to entry. Inquiries up 3x YoY.”
Kraken Shows Why Businesses Avoid US Users: Big Brother Always Lurking
Law enforcement inquiries seem never-ending if Kraken is to be believed. The American nanny state is perhaps the largest of its kind on the planet, investigating, hectoring, cajoling otherwise law observant businesses.
“Part of why these are so taxing is that they often require a significant amount of education and back-and-forth,” Kraken continued. “We’ll get requests for ‘all transactions,’ which could be petabytes of data when they actually only need the withdrawals from last week for one guy.”
It’s not at all unusual. US law enforcement officials are largely illiterate when it comes to the basics of technologies, and the vagaries of cryptocurrency, in terms of the fine details, require some focus and logic — neither of which are known hallmarks of either federal or local enforcement bureaus. Much of judicial prowess in the country is a giant fishing expedition, exploiting loopholes in legal language regarding nascent tech such as crypto exchanges.
Nobody Likes Having a Gun to Their Head
Exchange founder Jesse Powell put a finer point on things, noting, “On the one hand, we are happy to assist to the extent legally possible in the capture and prosecution of violent criminals and thieves. On the other hand, nobody likes having a gun to their head, being forced to divert labor from one’s own objectives to somebody else’s.”
For some observers it’s simply the nature of a regulatory state. There’s not a governor on its expansion, no way to slow it as it self perpetuates through capturing government bureaus and law makers. The system is ripe for rent seeking, and regulators are rewarded with cherry employment, lavish benefits, jobs for life, and enviable pensions.
It’s an insight many in the US lack when blocked by businesses who’d rather have nothing to do with the baggage Americans bring, lurking in the background. As a rational business decision, it’s often better to avoid American customers altogether, saving untold amounts of time and precious company funds. Remarked one startup in response to Kraken’s metrics, “We blocked US from our token sale and even from downloading our iOS and Android mobile wallets. Of course we love American consumers, but the logical choice at this point is to simply block rather than risk platform security.”
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