A former Trading Desk Manager at Kraken is suing the exchange for $900,000 for work not paid for. Jonathan Silverman was hired by the exchange in 2017 and worked in the New York office, agreeing terms on a $150,000 per year salary with a 10% commission bonus and stock options. Crucially however the commission and stock options were agreed verbally with Kraken founder Jesse Powell and nothing was formally signed. Silverman claims he did not receive his commission or the stock options and is suing for the amount of money he feels he is owed.
Kraken in Violation of the BitLicense?
Silverman is also countering claims made by Powell that Kraken no longer operates in New York because of the onerous BitLicense, a weighty set of regulations introduced in 2014 that heavily restricts cryptocurrency activities within the state. Many extant New York-based crypto services, including Kraken, ceased doing business there in order to escape the necessity of filing for a BitLicense, which Powell bemoaned at the time:
Regrettably, the abominable BitLicense has awakened. It is a creature so foul, so cruel that not even Kraken possesses the courage or strength to face its nasty, big, pointy teeth.
In Silverman’s filing, the assertion that Kraken has said goodbye to the Big Apple is challenged:
[Kraken has 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.
Kraken spokeswoman Christina Vee told Bloomberg that Silverman “is both lying and in breach of his confidentiality agreement.”
Two Cases Against Kraken
Silverman isn’t the only former employee currently challenging Kraken over alleged refusal to pay monies owed. Robert Adler, Silverman’s colleague on the trading desk, is also suing the exchange on the same principle – that he too was not paid his due commission and stock when he was let go from the company in May 2018. He makes the same allegation that Kraken continued to have a presence in New York after saying that they had moved their operations out.
Adler’s case was filed in September 2018, so his will be heard first, and it’s highly likely that Silverman’s case will be hugely affected by the outcome of Adler’s, seeing as they are almost identical. If Kraken is found to be in violation of their BitLicense, they could face a heavy fine.