David Ripley, incoming CEO at cryptocurrency exchange Kraken, didn’t mince words when speaking about Sam Bankman-Fried (SBF).
“I believe, what it boils all the way down to from all the knowledge we’ve got [and] this bankruptcy report that has now been released is that FTX and SBF are complete frauds—not only frauds, but thieves,” Ripley, who also served as COO at Kraken for over six years, tells Fortune.
Last week, it seemed cryptocurrency exchange Binance and its CEO Changpeng “CZ” Zhao had entertained the thought of helping FTX. But after due diligence, Binance and CZ opted out, citing issues at FTX that were “beyond our control or ability to assist.”
Soon after, reports circulated that FTX approached Kraken as a possible partner, but Ripley notes that a rescue was never within the cards.
“We’re always getting more inbound acquisition inquiries than I actually can keep track of, but there was never any legitimate discussion on acquiring FTX at any point,” he said. “It wouldn’t make sense for Kraken on a lot of fronts.”
Ripley also maintains that Kraken doesn’t have any exposure to FTX, Digital Currency Group (DCG), or any entities tied to SBF.
Kraken is currently cooperating with law enforcement, Ripley said, after someone behind a series of “unauthorized transactions” moved money from FTX to Kraken after FTX filed for bankruptcy. Kraken has said it knows the person’s identity but Ripley declined to share.
Looking ahead, Ripley sees promise in centralized exchanges issuing “proof of reserves,” which, in theory, would offer users transparency about assets and liabilities on exchanges used. That is something Kraken has done for years, Ripley said.
Ripley also views self custody, or personal ownership of cryptocurrency, to be vital. “Self custody is on the rise,” he said.
But, to Ripley, “the centralized exchanges are all the time going to have a task …. to construct [a] bridge from the legacy traditional economic system, from fiat to crypto.”
Our recent weekly Impact Report newsletter will examine how ESG news and trends are shaping the roles and responsibilities of today’s executives—and the way they’ll best navigate those challenges. Subscribe here.
