The founder made his start facilitating real money trading (sometimes against ToS) in online games via sites like lewt.com and d2legit.com: https://www.bitrated.com/jespow. I'd say his execution at Kraken is living up what you'd expect from someone with his background.
A "deposit but can't withdraw" policy, however temporary, should be a huge red flag about their solvency.
Bitfinexed is interesting. They remind me of Marc Cohodes, who often uncovers fraud but lacks the diligence to back up his claims and lacks the prose to convey his findings precisely.
Re Tether-Bitfinex-washtrading, the paper trail indicates that Bitfinex and Tether have the same controlling interests. Dividends aren't the deciding factor - figuring out how both businesses can generate income (Tether via issuing unbacked USD; Bitfinex by driving real volume via pretending to have fake volume).
Unlike the issue of unaudited bank accounts, the wash trading issue isn't as easy to point out, since it requires (a) knowledge of trades taking place behind a black box, (b) high volumes capital to test these trades that requires sending that capital to these exchanges you're skeptical of.
It's basically the opportunity cost of being able to trade quickly (xc->bank->xc would take 10+ business days) versus the risk of having co-mingled funds in an unregulated exchange.
The reason banks are regulated in the US is because the banking system pre 1930s wasn't too dissimilar from crypto now.
Rand speaks of an ethos of personal accountability versus one that hides their crimes behind a facade of claimed social norms. It's not an issue of private business vs public regulation other than the sort of people each group tends to attract.
Rule of law is pretty important to having a fluid economy. I've looking into starting businesses in parts of the world with fewer regulations - hard-to-attain power becomes the defacto currency in those economies. In crypto, the corollaries are Tether-like frauds and electricity-theft driven mining pools.
https://www.reddit.com/r/privacy/comments/cje7vg/dont_use_pu...