When trying to regain access to your Kraken account, you may be asked to jump on a video call with a support agent to prove you are actually who you say you are.

Last month, the centralized exchange said it caught someone wearing a Halloween-style rubber mask attempting to fool the worker on the other side of the call—but it didn’t work.

The attacker had raised a number of red flags during the first round of checks, such as failing to name the assets that the account held. These flags caused the agent working the case to require a video call to grant access to the account. During the call, the Kraken worker asked some more questions and checked the person’s ID.

The attacker failed this stage—in dramatic fashion.

“Our agent was like: This is absolutely ridiculous. This is a rubber mask the guy’s wearing,” Kraken Chief Security Officer Nick Percoco told Decrypt.

The mask didn’t even look like the person the attacker was claiming to be, Percoco said. The victim was a Caucasian male in his early 50s, so it appeared to Percoco that the attacker simply grabbed a mask that vaguely fit the description.

And this isn’t the first time someone has worn a disguise in an attempt to fool Kraken.

“[We] see things, from time to time, where people put on a fake mustache,” he told Decrypt. “They show [ID] and it looks close because they wear the same style glasses, have a mustache, and have blonde hair. We see that from time to time. They never pass.” 

“But this is the first time,” he added, “that someone has gone out to the costume store to get a mask.”

To make matters worse, the attacker didn’t even have a believable ID. It was “clearly” Photoshopped and printed onto card stock, Percoco explained, albeit with the correct information on it.

While this wasn’t a sophisticated attack, it highlights that even sloppy scammers can potentially gain access to the private information of everyday people. Even with such an unpolished attempt, Percoco believes, attackers could see success.

“I think it must [work],” he told Decrypt. “I think people wearing disguises, people who breach another place and get a copy of your government ID, and then print it out on glossy paper, holding that up… for some exchanges, that probably works.”

He claimed that some exchanges do not have the same level of attention to detail that Kraken demands from its team. Percoco specifically points to companies that outsource their support, claiming that this is more likely to lead to mistakes. 

If he’s correct, then this means that those using centralized exchanges shouldn’t always rely on the company to fend off bad actors. To protect themselves, Percoco says, users should deploy two-factor authentication “everywhere”—from your email to well beyond—to prevent bad actors getting any personal information at all costs.

Even with such protection methods employed, a user can still fall for phishing scams. For the top level of security, he recommends using FIDO2 and passkeys, which are hardware keys that can turn your phone or laptop into your password for an account.

“Passkeys are cryptographically bound to the sites and the applications you’re using them with,” he said, “so you can’t be duped into thinking you’re logging into Kraken.”

Edited by Andrew Hayward

Will he be sacked? Or will he quit? Either way, crypto industry antagonist Gary Gensler’s days as Securities and Exchange Commission Chair are likely to be numbered.

President-elect Donald Trump is poised to hammer home one of his most popular crypto promises made earlier this year. At least, that’s what many in the industry are hoping for.

“I will fire Gary Gensler on day one,” Trump declared at a Bitcoin conference in July, prompting thunderous applause from thousands in Nashville. “The day I take the oath of office, Joe Biden and Kamala Harris’ anti-crypto crusade will be over.”

Regardless of the fact that Trump’s words cut against Supreme Court precedent—as Decrypt has reported, a president can’t fire an SEC chair without cause—the names of several potential Gensler replacements are making the rounds ahead of Trump’s inauguration on January 20. 

That list includes Hester Peirce and Mark Uyeda, both SEC commissioners; Dan Gallagher, Robinhood’s chief counsel; former chairman of the U.S. Commodity Futures Trading Commission, Chris Giancarlo; and former Binance.US CEO Brian Brooks.  

Appointed by President Joe Biden, Gensler’s term as chair doesn’t end until 2026—with 18 months of wiggle room following his expiration date.

Still, SEC chairs have historically resigned when an opposing political party assumes control of the White House. Even so, Gensler, a Democrat, could be immediately demoted from chair to commissioner by Trump, leaving someone else to take up the mantle.

John Stark, an ardent crypto skeptic who once served as an SEC enforcement attorney, made the case for Peirce on Thursday.

“Most of the time, they just resign because they know that a new chair is going to be appointed,” Stark said. “The president will then immediately appoint someone to be acting chair, and that will usually be the senior member of that party.”

Nicknamed “Crypto Mom” for her support of the industry, Peirce has disagreed with the SEC’s penchant for suing crypto companies since she was appointed in 2018. Dissenting against an NFT-focused enforcement action in September, she derided the SEC’s approach as “misguided and overreaching,” creating many needless cases.

Of the SEC’s five current commissioners, three belong to the Democratic Party, including Gensler. Meanwhile, Peirce’s Republican colleague, Uyeda, who was appointed in 2022, is also being pitched as a potential contender.

“I’d give decent odds to Uyeda,” Jake Chervinsky, chief legal officer at Variant Fund, said in a tweet on Wednesday, adding that he thinks Peirce doesn’t want the job. He caveated, however, “I expect Trump may prefer to bring in someone new of his own.”

Peirce did not immediately respond to a request for comment from Decrypt.

With Trump’s transition team co-chaired by Cantor Fitzgerald Chairman and CEO Howard Lutnick, an outside pick to lead the SEC appears possible Fitzgerald views Wall Street as ripe for top cabinet positions, POLITICO reported Wednesday.

Robinhood’s Chief Legal Officer Gallagher would be a “natural choice,” according to one former SEC official who spoke with POLITICO.

Formerly serving as an SEC commissioner from 2011 to 2015, Gallagher testified before Congress earlier this year about digital asset regulation and a lack of “regulatory clarity at the federal level.”

After injecting over $119 million into federal elections this year, some leaders of digital asset firms are making calls of their own for Gensler’s replacement. Ripple Labs CEO Brad Garlinghouse encouraged Trump to appoint Gallagher as SEC chair on Wednesday, as well as Brooks or Giancarlo.

“They’d be massive upgrades in rebuilding the rule of law (and reputation) at the SEC,” Garlinghouse said. “Fire Gensler. Day 1, no delays.”

Nicknamed “Crypto Dad” for his commitment to digital assets as chairman of the U.S. Commodity Futures Trading Commission (CFTC) from 2017 to 2019, Giancarlo now works as senior counsel and co-chair of Willkie’s Digital Works practice. 

While Giancarlo led the CFTC, bitcoin futures became approved on the Chicago Mercantile Exchange. At the same time, he cultivated a “Do No Harm” approach to the digital assets industry, according to the conservative law group Federalist Society.

Brooks—who hasn’t yet earned a paternalistic moniker from the digital assets industry—most notably served as acting comptroller of the currency. Leading the independent arm of the U.S. Treasury Department, he was responsible for chartering, regulating, and supervising national banks.

From 2018 to 2020, Brooks served as chief legal officer for the crypto exchange Coinbase. After departing Washington, he also served as CEO of Binance.US, leaving the American company after four months due to “differences over strategic direction.”

Notably, Coinbase and Binance.US—alongside Binance and the exchange’s co-founder and former CEO Changpeng Zhao—face ongoing SEC lawsuits, which allege both firms breached its regulatory rules.

But with a Trump-led change in SEC leadership, former SEC official Stark said a shift in the agency’s stance would almost be certain.

“Does this mean that the SEC’s war on crypto is over?” he asked on Thursday. “I would say ‘absolutely,’ with a resounding ‘yes.’”

Edited by Sebastian Sinclair and Josh Quittner

The U.S. Securities and Exchange Commission has filed a motion in the Northern District Court of California, seeking to dismiss key defenses presented by Kraken in an ongoing legal dispute between the pair.

The regulatory watchdog contends Kraken had received prior fair notice when, last year, it charged the exchange with violating securities laws by offering crypto assets as “investment contracts,” according to a motion filed on Tuesday.

The timing of the SEC’s motion—filed on Election Day—prompted criticism from Kraken’s legal team, who view it as a tactic to avoid “discovery into the SEC’s defective and inconsistent policies.”

The agency seeks to eliminate Kraken’s claims of the major questions doctrine and due process violations—defenses Kraken argues are critical in protecting its operations from regulatory overreach. 

Kraken’s insistence on lacking regulatory clarity is “without merit,” and the exchange was adequately warned about the potential classification of its crypto offerings as securities, the SEC contends.

The motion builds on the SEC’s argument that federal securities laws apply to digital assets offered as investments, a stance that has fueled multiple regulatory clashes with crypto firms.

“The Court should dismiss these defenses to help maintain the proper scope of discovery, narrow summary judgment, save judicial and party resources, and prevent Kraken from trying to re-litigate the same issues repeatedly at every possible stage of this case,” states the filing.

Kraken’s attorney, Michael O’Connor, didn’t hold back in criticizing both the timing and intent of the SEC’s move, calling it an “Election Day gambit,” in a Wednesday statement on X. 

O’Connor referenced the Ripple case, where a similar SEC motion was dismissed, expressing confidence that Kraken’s defenses would withstand scrutiny.

The motion also arrives on the heels of Kraken’s demand for a jury trial. and its challenge to the SEC’s classification of 11 cryptos—including Solana (SOL), Cardano (ADA), and Polygon (MATIC)—as securities. 

Kraken claimed that its repeated attempts to register with the SEC were “stonewalled” by the agency, alleging that SEC Chair Gary Gensler has inconsistently applied securities laws to the detriment of the crypto industry.

The SEC’s motion arrives amid speculation that Chair Gary Gensler could soon step down. With Donald Trump’s projected election win, analysts suggest Gensler may resign by year-end, following the precedent of SEC chairs leaving office during a change in administration.

Edited by Sebastian Sinclair