In an effort to lead the industry in trust and transparency in our mission to accelerate cryptocurrency adoption, we are pleased to launch our Transparency Report 2022.
The 2022 Transparency Report provides a summary of how we protect the privacy and financial freedom of our clients while complying with the legal requests we regularly receive from agencies around the world.
From a NFT Market still professional trading interface, Kraken offers a variety of cryptographic products and services to more than 9 million customers in 190 different countries. Last year, Kraken received data requests from government and law enforcement agencies located in more than 60 different countries. While these requesting agencies were distributed at the federal, state, and local levels, the majority of the requests received came from law enforcement agencies.
Kraken receives all kinds of legal demands for information, including subpoenas, subpoenas, court orders, and other legal requests. Kraken has put in place strict policies and procedures to protect customer privacy, which are carefully followed before any customer data is generated. Kraken provides data when we have a legal obligation to comply with the demand. It is important to note that failure to comply when we are legally required to do so may result in civil or criminal penalties against Kraken.
Kraken received a total of 3,705 requests during the reporting period, an increase of 51% over last year.
71% of applications came from outside the US for a total of 2,624 non-US applications. US-based applications totaled 1,081.
Most of the law enforcement requests came from the US, Germany, Great Britain and Spain.
We saw 79% of our US requests come from law enforcement for a total of 852 requests from US-based law enforcement agencies.
Fifty-one percent increase in the number of government and law enforcement requests by 2022
The number of applications received in 2022 represented a 51% increase over the previous year. This continues the trend of increasing volume of applications that we have seen in recent years.
To illustrate, the year-over-year percentage increase since 2019 compared to 2022 is over 420%. Despite the tremendous increase in requests, Kraken continues to emphasize the protection of our customers’ data through our adherence to strong policies and careful compliance with legal obligations.
In order to efficiently and professionally meet requests from these agencies, we continue to expand and strengthen our compliance program. Over the past year, we’ve expanded our Compliance Team’s headcount by 55% to meet the demands of the global network of agencies requesting information from Kraken.
Kraken’s compliance team is made up of experienced AML professionals, attorneys, former law enforcement officers, ACAMS-certified analysts, and many other professionals with cryptocurrency-related accreditations. The team works to ensure that Kraken conducts the appropriate investigations and follow-up for our clients and the industry.
US-based agencies issue the most requests
As has been the case for the past several years, US-based agencies continue to issue the majority of requests. US applications (1,081) represented approximately 29% of the applications received by Kraken. The other top applicant countries in sequential order were Germany (784), Great Britain (385), Spain (272) and France (251). These five countries also issued the most applications in 2021.
Highest number of requests issued by the FBI
Of all the more than 60 government and law enforcement agencies making requests, the FBI has issued the largest number of requests in recent years. They continued this trend again in 2022. FBI requests account for approximately 31% (332) of requests from US-based agencies. The next top two US-based agencies were DHS-ICE ( 145) and the DEA (109).
“By 2023, Kraken is reaffirming our commitment to work together with law enforcement and government agencies to eliminate criminals and bad actors in this space. However, we are equally committed to providing the best possible service to our clients, while working to safeguard their funds and privacy.” said David Zacks, Senior Director of Compliance at Kraken. “This year’s Transparency Report once again offers a deeper level of clarity on how Kraken executes on our mission to accelerate cryptocurrency adoption while protecting our customers’ financial freedom across our various products and services.” .
Even with the significant increase in the volume of requests and the increased scrutiny of the cryptocurrency industry by government and law enforcement agencies, Kraken will continue to work diligently to protect the privacy of our customers while continuing to respond to the numerous requests. Government and law enforcement requests we receive. .
These materials are for general information purposes only and are not investment advice or a recommendation or solicitation to buy, sell or hold any crypto asset or to engage in any specific trading strategy. Some cryptographic markets and products are not regulated and you may not be protected by government compensation schemes and/or regulatory protection. The unpredictable nature of crypto asset markets can lead to loss of funds. Taxes may be payable on any returns and/or on any increase in the value of your crypto assets and you should seek independent advice on your tax position. For more information, see our Terms of Service.
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