Jesse Powell, CEO of Kraken, on Drawing a Line With Regulators

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I'm recording today from the CoinDesk Consensus Conference in New York City. My guest is Jesse Powell, co-founder and CEO of Kraken. Welcome, Jesse.
What does Kraken do and how does it distinguish itself from the other crypto exchanges in the space?

**Jesse Powell** (1:59)
Kraken is a digital asset exchange. We trade 17 assets, and I'd say we distinguish ourselves with our customer service and our security.

**Laura Shin** (2:10)
And you offer actually quite a number of tokens compared to some of the other exchanges like Gemini and Coinbase. How do you get so many on the platform?

**Jesse Powell** (2:20)
We've got a large team of people responsible for managing the token gateways, which is basically the technical work required to process transactions on those networks. We've also got a team of guys that are evaluating the tokens for listing qualifications.

**Laura Shin** (2:37)
And when you said that one of your priorities is security, or one of the ways you distinguish yourself as security, how do you do that when a lot of people talk about how these exchanges are big honeypots and they're on 24-7-365, and especially in your case where you have multiple tokens, how do you keep things secure?

**Jesse Powell** (3:02)
Yeah, well, with a lot of hard work and a lot of diligence and just being extremely careful about everything we do all the time, not just at the technical level but also at the personal level, in terms of training our people, how we operate, the length that we go to to keep things private. So that could involve creating proxy entities to contract with our service providers, to using pseudonyms wherever possible, basically trying to keep the entire operation as private as possible.

**Laura Shin** (3:43)
Oh, interesting. So contractors don't know that it's a crypto exchange.

**Jesse Powell** (3:47)
Wherever possible, yeah.

**Laura Shin** (3:48)
Oh, wow. That's really interesting. That's smart.
And how do you decide which cryptocurrencies and crypto assets to add to your platform?

**Jesse Powell** (3:55)
So we've got a very thorough evaluation process. We've got over a hundred things that we look at when evaluating a token from, you know, the main thing we're looking at is basically, is this token still going to be around tomorrow and is it a scam? You know, we do some work on, you know, we try to look at like the technical merit as part of that. But the main things are, you know, we just want to protect people from things that are outright scams.
And we also look at the technical difficulty of supporting it and continuing to maintain the protocol.
So if it's something that's very early stage and is going to require a lot of work to maintain, that might be something that we wait until a further stage of development to list. So anyway, in all, it's a very lengthy process. We spend a lot of resources to evaluate the tokens. So we certainly haven't evaluated every token, but the ones that we do evaluate tend to be the ones that our clients are really asking us to take a look at.