Recently, Jesse Powell, the founder of the U.S. regulated exchange Kraken, publicly advised people who do not frequently trade to withdraw their cryptocurrencies from centralized exchanges, including his own exchange. He also mentioned that in a problematic operational state, the government could potentially freeze users' tokens on the exchange, citing a case from the Canadian government last year.

This information was shared by the verified Twitter account @THORmaximalist, who heard it during a Twitter Space session where Jesse Powell stated that Kraken has over 100 people responsible for backend system security, whereas FTX only has 50 people overall, making it vulnerable.

Jesse Powell emphasized the importance of keeping one's tokens securely stored in their own wallets, as no one knows how the situation will evolve. He also advised people to stay away from platforms that offer lending services.

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He stated that from Kraken's perspective, users' assets are debts, and they do not charge fees to protect these assets. If a centralized entity asks you to deposit your money with them, you must question why you should do so.

Founder of Kraken @jespow telling people in Twitter spaces to take their coins off exchanges, including his own, if you’re not actively trading.

He says even if the exchange runs a tight ship, the government can seize your coins on CEX. The Canadian government did it last year.

— TCB (@THORmaximalist) November 13, 2022

Jesse Powell Reiterates His Stance

Jesse Powell's remarks may come as a shock to some and may even be perceived as hypocritical, but the fact is, he had made similar comments back in February this year. In response to the Canadian government freezing exchange user funds, he stated that if faced with a similar situation, he would still choose to comply with regulations and freeze user funds. He suggested that if people are concerned, they should withdraw funds from centralized exchanges and consider using regulated custodians or peer-to-peer trading platforms.

We can't protect you. Hold your own coins, or convert to fiat, or use P2P trading!

100% yes it has/will happen and 100% yes, we will be forced to comply. If you're worried about it, don't keep your funds with any centralized/regulated custodian. We cannot protect you. Get your coins/cash out and only trade p2p.

— Jesse Powell (@jespow) February 18, 2022

Pioneer of Proof of Reserves

An article titled "Insights from the FTX Incident: 'No Proof of Reserves' Is Just Talk - Can Your Exchange Do Proof of Reserves?" mentions that Kraken is a pioneer in Proof of Reserves, even utilizing a Merkle tree proof of reserves that Binance has yet to complete.

Kraken is perhaps one of the most straightforward exchanges today.