The chief executive of Kraken, the world's fourth largest digital currency exchange, has warned that governments may begin to restrict the use of bitcoin and other cryptocurrencies.

Earlier, officials such as Janet Yellen, the US Treasury Secretary, and Christine Lagarde, the president of the European Central Bank, had sounded alarm bells about illegal activities such as money laundering using bitcoin.

"I think there may be some crackdown," Jesse Powell, Kraken's chief executive, said in an interview. Recently, the value of cryptocurrency has soared, with bitcoin reaching an all-time high of more than $61000 last month.

Last week, media reported that Kraken is considering going public next year through a direct listing after record trading volume in the first quarter.

Coinbase, which plans to go public on Wednesday, could be worth as much as $100 billion, surpassing major exchanges such as ice, the parent of the New York Stock Exchange. After years of questioning by Wall Street and regulators, cryptocurrency investors believe the company's listing will be an important milestone in the industry.

Nevertheless, Powell believes that the regulatory uncertainty surrounding encryption will not disappear soon. The U.S. government recently proposed an anti money laundering rule that requires individuals holding cryptocurrency in digital wallets to conduct identity checks when they conduct transactions of $3000 or more.

"Things like that could really hurt cryptocurrency and stifle its original way of use, which is just making the financial service available to everyone," he said

Cryptocurrencies such as bitcoin are usually associated with illegal activities because transactions are anonymous.

(2021-4-13)