Cryptocurrencies

Kraken CEO Jesse Powell Issues Tough Critique of ‘Reckless’ DeFi Launches

Kraken CEO Jesse Powell (CoinDesk archives)

Jesse Powell, chief executive of the U.S.-based cryptocurrency exchange Kraken, has lashed out at the decentralized finance (DeFi) sector in the aftermath of Monday’s $24 million arbitrage exploit of Harvest Finance.

In a tweet on Tuesday, Powell said he would “not accept” DeFi projects’ attempts at “externalizing the cost” of “hasty reckless” rollouts.

“Stop f**king up your bulls**t DeFi scams and expecting exchanges to bail you out,” Powell said. “Invest in audits, insurance and please [do your own research].”

Related: Cred Says Fraudulent Activity Led to Loss of Funds; Law Enforcement Investigating

The comments come after several DeFi projects suffered some form of an exploit or major management failure, while some have opened to investors with faulty or negligible audits of their code.

At the end of September, gaming protocol Eminence Finance suffered an exploit that saw $15 million worth of DAI drained while still in testing.

The same month, DeFi project SushiSwap suffered a major blow when its pseudonymous creator “Chef Nomi” made off with the development fund, prompting a 73% crash in its SUSHI token. Chef Nomi did eventually hand back the $14 million worth of ether (ETH) and apologized to affected investors.

Still, the incident highlighted the danger of placing trust, and money, in projects run by unknown individuals.

Related: Coinbase Goes Down as Bitcoin Approaches 2019 Highs

See also: So Now They’re Hacking DeFi Protocols Before They’ve Even Launched?

Also in September, DeFi lending protocol bZx fell victim to its third exploit of the year after a flaw in its code allowed someone to make off with $8 million in crypto.

Despite all this, the DeFi sector is still drawing investors seeking yield, reaching a new milestone of $12.45 billion in total value locked up in smart contracts on Oct. 25.

That figure dropped by about $1.15 billion after Monday’s exploit of Harvest, and now stands at $11.3 billion, according to DeFi Pulse.

It’s not clear why Powell suggested exchanges are having to “bail out” DeFi failures. CoinDesk reached out to clarify but did not receive a reply by press time.

Related Stories

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Latest Cryptocurrencies Videos

    CoinDesk

    CoinDesk is the leading digital media, events and information services company for the crypto asset and blockchain technology community. Its mandate is to inform, educate and connect the global community as the authoritative daily news provider dedicated to chronicling the space. Founded in May 2013, CoinDesk reaches millions interested in blockchain technology thru its website, social media, newsletters, podcasts and video. CoinDesk created the original reference rate known as the Bitcoin Price Index which is widely sourced in the media including The Wall Street Journal, Financial Times, CNBC and many others on a daily basis.

    Learn More