Cryptocurrency exchange Kraken is having its integrity questioned, after one of its former employees kicked off legal proceedings against it in connection with several violations.
According to a filing made on November 26, Nathan Peter Runyon, a former military man who served as a Financial Analyst under Kraken chief executive Kaiser Ng, has sued the company. The analyst is accusing both the business and his former boss of falsifying documents and committing a litany of legal violations.
Fraud and Contract Violations
More specifically, Runyon accused the exchange of committing several illegal and unethical business practices, including violating economic sanctions, swindling employees out of their stock option packages, faking company office addresses, and discriminating against him due to his disability.
The ex-marine veteran started working for the company in August 2018, and as his filing explains, he summarily came across several questionable practices. Most significantly, he claimed that the company had provided services to and earned a chunk of its revenues from serving countries that are on the Specially Designated Nationals and Blocked Persons List, which is compiled by the United States Department of the Treasury’s Office of Foreign Assets Control.
He also pointed out that the company’s bank balances were also short of customer deposits that amounted to millions of dollars. He claimed that the company never conducted any employee performance evaluations, while the executives regularly changed the grant vesting schedules on employees’ stock options without going through due process.
Also, Ng is said to have asked Runyon if he could use his address to file applications to banks and financial regulators. While Runyon agreed under the terms that the company would make payments for using his home, the company went ahead and never made any payments.
Moreover, Ng allegedly asked Runyon if the company could use a room in his house and adopt his home address for audit applications to banks and financial regulators. Runyon agreed, although the company allegedly didn’t pay him any rent for using his apartment. He eventually presented his discoveries of the company’s misdemeanors to Ng, but found his warnings ignored by the exchange boss, who went on to gradually exclude him from projects.
The veteran was eventually fired on August 1, 2019, and he claims that his boss had orchestrated his dismissal because he found out that he had been defrauding employees out of their stock options.
Kraken Purchases Circle Trade
The suit is also being made public on the same day that Kraken is finalizing the purchase of Circle Trade, the over-the-counter (OTC) trading desk owned by payment processor Circle. The company, which seems to be streamlining its workforce and refocusing its crypto strategy (sold its trading exchange subsidiary Poloniex this year), explained that they have confidence that Kraken will continue to provide the best OTC liquidity services to Circle Trade customers.