Former employee files lawsuit against Kraken, demands $900K compensation

08 Apr, 2019 | Updated: 08 Apr, 2019
by Fifi Arisandi
Exchange
Former employee files lawsuit against Kraken, demands $900K compensation

Jesse Powell’s crypto exchange, Kraken is facing a lawsuit from a former employee, Jonathan Silverman. 

An unpleasant news about crypto exchange, Kraken has just emerged.

Their former trading desk manager filed a lawsuit against them for allegedly failing to pay him the promised 10% commission of the trading desk’s annual profit during his 3 months tenureship.

Silverman, who was hired in April 2017 demanded a $900,000 compensation for more than $19 million profits the trading desk generated while he was in charge.

The compensation he requested is just slightly different to the number that Kraken agreed to pay to him in a settlement done after his leaving the company, which was $907,631.

Silverman, who was one of at least 2 persons employed at Kraken’s New York trading office claimed that Kraken “refuses” to pay the lump sum settlement.

Speaking on behalf of Kraken, Christina Vee said that Silverman is “both lying and in breach of his confidentiality agreement”.

Additionally, aside from the compensation, Silverman also challenged Kraken’s statement that they’ve been out of New York since 2015, thus the state’s regulations don’t apply to them.

According to the lawsuit, Kraken had been “misrepresenting to the public and government regulators that it was not operating in New York; when in reality, Kraken’s OTC practice, and OTC trading (including logging into the Kraken exchange and negotiating wire transfers) occurred almost exclusively in New York”.

In another lawsuit, former employee, Robert Adler also mentioned that Kraken’s New York trading desk managed to generate a $19 million profit from September 15 to end of 2017 alone.

Both claims controvert CEO Jesse Powell’s statement in a tweet back in April 2018, “We made the wise decision to get the hell out of New York three years ago,” as well as Kraken’s official announcement on their blog titled, “Farewell, New York.”

According to Bloomberg, internal trading desk is crypto exchanges' "dirty little secret" and it’s more common than in the traditional financial world.

Several exchanges, such as Bitfinex, bitFlyer and Poloniex are already on a New York Attorney General’s list of exchanges that conduct such practices.

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