<p><span data-contrast="none">Barely a month into his new role, Blair Halliday was just finding his feet at crypto exchange Kraken when the spectacular collapse of rival FTX shook the industry to its foundations. </span></p> <p><span data-contrast="none">Kraken </span><a href="https://www.theblock.co/post/177012/kraken-poaches-geminis-head-of-uk-to-run-its-uk-operations"><span data-contrast="none">announced</span></a><span data-contrast="none"> in </span>October<span data-contrast="none"> that Halliday had joined from Gemini, another exchange, to run its UK operations and expand in the region. </span><span data-contrast="none">Now, Halliday is also having to navigate a reckoning for centralized exchanges after </span><span data-contrast="none">FTX filed for Chapter 11 bankruptcy protection this month amid <a href="https://www.theblock.co/post/186132/ftx-collapse-timeline-six-days-that-rocked-the-crypto-industry">reports</a> of billions in missing client funds.</span></p> <p><span data-contrast="none">“Regardless of the state of things as they currently are, joining Kraken was a terrific opportunity for me and remains one that I'm particularly proud and excited about,” Halliday said in an interview. “Whether you asked me this now or several weeks back, the song remains the same.”</span><span data-ccp-props="{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span></p> <p><span data-contrast="none">“Whilst the industry is recoiling from the FTX collapse and the subsequent fallout from that, personally I remain extraordinarily bullish on two fronts. I am extraordinarily bullish about Kraken, Kraken remains [in] an extraordinarily strong position,” he added.</span><span data-ccp-props="{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span></p> <h2>Show me the assets</h2> <p><span data-contrast="none">Kraken is one of crypto’s oldest exchanges, having been founded in 2011. And Halliday — a crypto and financial services veteran who has worked in compliance roles at Circle and JPMorgan as well as spending 14 years at UK bank NatWest — </span><span data-contrast="none">is optimistic on its ability to shore up consumer confidence.</span></p> <p><span data-contrast="none">With crypto exchanges scrambling to produce proof-of-reserves</span> audits in an effort to increase transparency, Halliday pointed out that Kraken was<span data-contrast="none"> the first to </span><a href="https://www.coindesk.com/markets/2014/03/24/kraken-bitcoin-exchange-passes-proof-of-reserves-cryptographic-audit/"><span data-contrast="none">introduce</span></a><span data-contrast="none"> such an audit, back in 2014.</span><span data-ccp-props="{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span></p> <p><span data-contrast="none">And earlier this year, Kraken <a href="https://www.kraken.com/en-gb/press/releases/kraken-launches-proof-of-reserves-audits-allowing-clients-to-verify-crypto-balances">announced</a> that accounting firm Armanino would conduct semi-annual proof-of-reserve audits, enabling customers to prove their bitcoin and ether balances were backed by real assets</span><span data-contrast="none">. </span><span data-contrast="none">Kraken </span><a href="https://blog.kraken.com/post/15002/kraken-proof-of-reserves-audit-expands-to-include-five-new-assets/"><span data-contrast="none">expanded</span></a><span data-contrast="none"> the audit to several other crypto assets in August.</span><span data-ccp-props="{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span></p> <p><span data-contrast="none">Armanino was <a href="https://www.ft.com/content/930c6cea-5457-4dfa-9d47-666c0698c335">reportedly</a> responsible for auditing FTX's 2021 financial results — although not its reserves.</span></p> <p><span data-contrast="none">Kraken's most recent proof-of-reserves audit covered around 65% of assets, Halliday said.</span><span data-ccp-props="{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> To further prop up client confidence, he said he wants to bring this</span><span data-contrast="none"> closer to 100% in future. </span></p> <h2>No silver bullet</h2> <p><span data-contrast="none">Proof of reserves has its challenges, however. It's simply a snapshot of assets at a point in time, which creates opportunities for manipulation.</span><span data-ccp-props="{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span></p> <p><span data-contrast="none">Reserves are just one facet of many interconnected financial metrics, said Wayne Trench, CEO of exchange OSL, in a </span><a href="https://www.theblock.co/post/187240/exchanges-rushed-to-show-proof-of-reserves-its-not-enough"><span data-contrast="none">recent interview</span></a><span data-contrast="none"> with The Block. They don’t reveal audited fiat reserves, client and company liabilities, company loans and a lot of other information required to verify a firm’s financial health, he added.</span><span data-ccp-props="{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span></p> <p><span data-contrast="none">Halliday concurred. “Proof of reserves isn't the silver bullet. It's part of the arsenal of ensuring that the consumers and institutions get additional comfort.”</span></p> <p><span data-contrast="none">Other components in the arsenal include having a strong customer service model and securing relevant regulatory approvals, Halliday said.</span><span data-ccp-props="{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span></p> <p><span data-contrast="none">“Whilst there's a lot to be done, we're confident that we're helping to show the way forward,” Halliday said.</span><span data-ccp-props="{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span></p> <p><span data-contrast="none">A big part of Kraken’s plans and top of Halliday’s agenda is getting this message across to consumers through marketing and brand awareness with various roll outs planned for the coming weeks and into the new year.</span><span data-ccp-props="{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span></p> <p><span data-contrast="none">“We're not going to move enormously away from what we are as an institution, which is talking about the importance of security, talking about giving access to education and all that good stuff.”</span><span data-ccp-props="{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span></p> <p><span data-contrast="none">Halliday was also excited to talk up Kraken's presence in the UK, one its largest markets by trading volume.</span></p> <p><span data-contrast="none">“We have over 350 people here, it is a really important part of our plan to continue our growth,” Halliday said. “And we're looking forward to introducing marketing,</span> <span data-contrast="none">which no doubt some of that will have a UK play but also be about Kraken’s global mission and crypto.”</span><span data-ccp-props="{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span></p> <h2>Keeping its own counsel</h2> <p><span data-contrast="none">While Kraken could look to leverage FTX’s collapse to bolster growth through hiring or M&amp;A deals, the exchange is keeping quiet for now.</span><span data-ccp-props="{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span></p> <p><span data-contrast="none">Kraken is continuing to focus on key hires this year and into next, Halliday said.</span><span data-ccp-props="{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> The company currently has over 3,400 employees across 75 countries.</span></p> <p><span data-contrast="none">“The desire and the willingness to invest remains there,” Halliday said. “And where we need those hires, we will absolutely do them and I’m looking forward to bringing more talented people into the crypto UK family.”</span><span data-ccp-props="{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span></p> <p><span data-contrast="none">Likewise, the exchange is open to investing in growing its operations in Europe where there isn’t an existing presence, Halliday said.</span><span data-ccp-props="{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span></p> <p><span data-contrast="none">“There might not necessarily have been a whole bunch of headline acquisitions, I think it would also be fair to say that we keep our counsel on that,” Halliday said. “And it's not necessarily [something] we go public with, which is maybe in contrast to certain other firms.”</span><span data-ccp-props="{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span></p> <p><iframe frameborder="0" height="420" 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