Jesse Powell

Jesse Powell @jespow

Rough day at @krakenfx. Headcount rolled back 12 mos. Macro was already tough and we held out but recent industry woes diminished near-term optimism about a crypto rebound. Better positioned now. Glad we were able to take good care of our former colleagues. Been a privilege. 🙇‍♂️ — PolitiTweet.org

Jesse Powell @jespow

@robhonig @krakenfx You might like our new Desktop trading app: https://t.co/Rr8rZyTXoF — PolitiTweet.org

Jesse Powell @jespow

@schwab_clarence @smolwet @Carol_VanCleef @krakenfx What are the KYC/AML issues? How do they affect Kraken clients? — PolitiTweet.org

Jesse Powell @jespow

@Nakamotolisk @krakenfx Thanks! I checked with the team and we are not aware of any widespread issues. Possible something specific to an individual account. Fully agree with not taking chances though. — PolitiTweet.org

Jesse Powell @jespow

@Nakamotolisk @krakenfx Are you talking about this issue that was resolved a week ago?https://t.co/K4zWJ0ERbt — PolitiTweet.org

Jesse Powell @jespow

@smolwet @Carol_VanCleef @krakenfx It's a very complicated issue with online accounts. You can't always be sure it's even the account owner logging in. Could be a hacker. Could be they're using a VPN. Could be they're in an embassy or just on a layover at the airport. The IP doesn't tell you where the person is. — PolitiTweet.org

Jesse Powell @jespow

@Carol_VanCleef @krakenfx To be clear the payment is _for_ a settlement, not a fine, of a self-disclosed potential issue. The GeoIP thing is complicated and it's not about KYC. People can register in one place and travel to another. GeoIP databases can become stale and aren't perfect. People use proxies. — PolitiTweet.org

Jesse Powell @jespow

@julianhosp @elonmusk Oh interesting. I can’t find that feature on mobile. Given the specific people, I agree that it’s highly unlikely that they intentionally went out of their way to remove me as a follower. — PolitiTweet.org

Jesse Powell @jespow

Anyone else have their account mysteriously stealth unfollow a bunch of people? Noticed several in the past week I’ve had to follow again. — PolitiTweet.org

Jesse Powell @jespow

@laurashin @leomschwartz Odd that the article fails to mention the exchanges that have been performing PoR and calling for others to follow before the FTX blowup. I hope that other exchanges will do a PoR but, in the past week, we have only seen attempts to redefine what PoR means and confuse people. — PolitiTweet.org

Jesse Powell @jespow

@IamDaveChapman @osldotcom Don't let the perfect be the enemy of the good. Legit PoR would have caught Gox and FTX when the holes were a lot smaller. If an exchange can't at least prove that it has enough coins to cover client balances, we don't need to know about the other liabilities to call insolvency. — PolitiTweet.org

Jesse Powell @jespow

@cadhodl @PopMelancholic @FatManTerra @hellspawncrypto @cz_binance It's about minimum liabilities. You will never be able to prove 100% max liabilities. If the exchange doesn't have enough assets to cover min liabilities then that's all you need to know. If we had known that for Gox & FTX, damage would have been way less. https://t.co/1t2SNA0dZ1 — PolitiTweet.org

Jesse Powell @jespow

@BitMEXResearch @FatManTerra @coinmetrics @TheBlock__ Then you need to look at the construction of the tree and which accounts would be in a position to identify negative balances. It's so much easier to just 1. get an auditor to confirm no shenanigans, 2. publish the whole list of balances. Assume a bad actor would use all tricks. — PolitiTweet.org

Jesse Powell @jespow

@HODLaser This process involved an auditor who made sure we didn't include negative balances. It also involved a proof of assets. — PolitiTweet.org

Jesse Powell @jespow

@cadhodl @PopMelancholic @FatManTerra @hellspawncrypto @cz_binance This proves neither assets under control nor total client liabilities. This merkle tree is just hashes of rows on a spreadsheet, for which we have no idea whether has been fully captured, includes negative balances, etc. It's completely worthless as evidence of anything. — PolitiTweet.org

Jesse Powell @jespow

@scottburke777 @VitalikButerin The merkle tree is 100% worthless without someone to verify that it didn't include negative balances. We still have not seen proof of control of any list of wallets either. https://t.co/y6lJag9vMM — PolitiTweet.org

Jesse Powell @jespow

@kyle_chasse @Nexo I can't find much info on how this works. If you have cold storage, how are you proving that you still have control all the time? Unless all users are running real-time validation bots, how would they actually test the process? How could the auditor review everything in realtime? — PolitiTweet.org

Jesse Powell @jespow

@AriDavidPaul Yeah, borrowing to fill the hole during an audit is one of the shortcomings but it could be spotted on chain. Harder to conceal with frequent audits. Also, maybe you can pull it off for a small shortfall but at $1b+ it gets harder to find a lender willing to take the risk on you. — PolitiTweet.org

Jesse Powell @jespow

@FatManTerra @gods_protege1 @cz_binance @binance I could be missing something. Maybe @nic__carter can chime in. As far as I can tell from a quick look at a few of these, I don't see how they have accounted for the negative balance in the merkle tree problem. Have the self-attested provided a transparent list of all balances? — PolitiTweet.org

Jesse Powell @jespow

@FatManTerra @hellspawncrypto @cz_binance It's a 0 or 1 thing though. You don't get 5% credit for baking a cake because you threw some flour in a bowl. Without the complete process, it's 100% worthless. To give any credit for this is a mistake. Question why they'd be seeking credit for it though. https://t.co/aAKmopNTzq — PolitiTweet.org

Jesse Powell @jespow

@AriDavidPaul Think of the audited merkle tree of client balances as proof of MINIMUM liabilities. You will never be able to prove 100% of total MAX liabilities but you can prove what you owe to clients and control. Gox and FTX would not have been able to prove assets > client liabilities. — PolitiTweet.org

Jesse Powell @jespow

@FatManTerra @hellspawncrypto @cz_binance 1. When did they verify ownership of wallets? 2. how do we know balances didn't include negative? 3. merkle tree is worthless without auditor review 4. without the auditor it's all nothing. This is like saying "we built a rocket. engine coming soon." What you have is a tube, bro. — PolitiTweet.org

Jesse Powell @jespow

@KevinMurcko Thanks for the link. The merkle tree of client liabilities is useful if you have an auditor to confirm that no negative balances were included. Balances are 1/2 of the equation. We need to know that the exchange has control of the assets >= liabilities. https://t.co/y6lJag9vMM — PolitiTweet.org

Jesse Powell @jespow

@NikitaAFadeev @CdennehyChris @VitalikButerin As others have said, this is worse than nothing because it's pretending to be something it's not. It's not just "not enough". It's literally nothing but it does raise a question: why would someone hold out nothing and call it something? — PolitiTweet.org

Jesse Powell @jespow

@IAmRipoff Still on the throne for now, and I'm stepping up to Chairman after I hand off. — PolitiTweet.org

Jesse Powell @jespow

@gods_protege1 @cz_binance @binance Listing out some wallets without proving you control them is not that valuable. PoR is about matching up assets vs liabilities and proving you control the assets. https://t.co/FLGdib4DhK — PolitiTweet.org

Jesse Powell @jespow

@scottburke777 @VitalikButerin This merkle tree has nothing to do with a blockchain. This is hashes of rows on a spreadsheet. It's not better than nothing because it pretends to be something it's not. Nothing at least would not be misleading. If the car doesn't have wheels, do the mirrors matter? — PolitiTweet.org

Jesse Powell @jespow

People who oughta know better, journalists, especially, should take the time to understand this before overselling it and misleading consumers. https://t.co/Qzb5UY3Bdj — PolitiTweet.org

Jesse Powell @jespow

This is simply "here's a hash of your record in the BTC spreadsheet". ok... but what's the point? The whole point of this is to understand whether an exchange has more crypto in its custody than it owes to clients. Putting a hash on a row ID is worthless without everything else. — PolitiTweet.org

Jesse Powell @jespow

I'm sorry but no. This is not PoR. This is either ignorance or intentional misrepresentation. The merkle tree is just hand wavey bullshit without an auditor to make sure you didn't include accounts with negative balances. The statement of assets is pointless without liabilities. — PolitiTweet.org