Kraken CEO: ‘Defi Scams’ Must Take Their Losses as Way to ‘Enlightenment’

Kraken CEO: ‘Defi Scams’ Must Take Their Losses as Way to ‘Enlightenment’

Jesse Powell, chief executive officer of the world’s fourth-largest crypto exchange Kraken, has criticized decentralized finance (defi) projects, accusing them of being “scams” that enter the market too quickly, unprepared.

In a charged Oct. 26 tweet, Powell said the “scams” should not expect crypto exchanges to bail them out once things go wrong. Preferring to let the defi projects fail in order that they get “enlightened”, he thundered:

I will not accept your attempt at externalizing the cost of your hasty, reckless rollout. Invest in audits, insurance and please DYOR. Taking your losses is the only way to enlightenment.

Powell’s comments come after a series of hacks this year forced several defi protocols to plead for help from crypto exchanges to block the attackers from accessing the stolen money.

According to ICO Analytics, six decentralized finance protocols have been exploited nine times since February, with the attackers plundering a total of $82 million in multiple cryptocurrencies.

Lending platform Bzx has had the ignominy of being exploited repeatedly, at least on three separate occasions, losing a combined $9 million. In the hack of Sept. 14, which was Bzx’s third, the platform lost $8.1 million but it later recovered all the funds.

Some $25 million was looted from Dforce on April 19, though the attacker returned the money to the protocol. Andre Cronje’s Eminence lost $15 million on Sept. 29 while it was still work-in-progress – rather absurd that investors poured millions of dollars into an untested protocol.

Major defi projects Uniswap, Maker, and Balancer have all lost money to hackers. The latest exploit involves that of Harvest Finance, a $24 million heist. A common thread runs through the hack aftermath – defi protocols asking crypto exchanges to intervene and stop the cyber-criminals from accessing the stolen money.

Interestingly though, Kraken has listed several decentralized finance tokens despite Powell’s harsh criticism. Projects such as Compound (COMP), Yearn Finance (YFI), and Kyber Network (KNC) are quoted on the exchange, which had $477 million in traded volume over the past 24 hours.

What do you think about Jesse Powell’s defi comments? Share your thoughts in the comments section below.

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