Cryptocurrency Exchange Hires Ex-US Attorney, Bryan Cave Partner as GC
Mary Beth Buchanan, a former top federal prosecutor and Bryan Cave Leighton Paisner partner, is now general counsel of Kraken, a bitcoin exchange operator that's been in the news lately for publicly defying the New York Attorney General's Office.
May 29, 2018 at 04:23 PM
4 minute read
The original version of this story was published on The American Lawyer
Mary Beth Buchanan.
Former federal prosecutor and Bryan Cave Leighton Paisner partner Mary Beth Buchanan has landed in a general counsel role at Kraken, a cryptocurrency exchange operator that has taken a defiant stance toward a New York attorney general inquiry of several businesses in the crypto sector.
Buchanan, a President George W. Bush-appointed former U.S. attorney in Pittsburgh from 2001 to 2009, joined Kraken after leaving her recent post at Bryan Cave, where she served as a partner in the firm's white-collar defense and investigations and securities litigation and enforcement group. In an email on Tuesday, Buchanan said she joined the company as general counsel in April. She was not immediately available for further comment.
Previously, Bryan Cave said in a statement that Buchanan had left the firm to fill an in-house role for an unnamed firm “client,” and the move had been planned “for many months.” A Bryan Cave representative confirmed on Tuesday that Kraken is, in fact, the client that Buchanan joined. Kraken did not immediately respond to a request for comment about Buchanan's hire.
Kraken, founded in 2011 in San Francisco, is a bitcoin exchange operating in the United States, Canada, the U.K., the European Union and Japan. The company bills itself as the largest bitcoin exchange in euro trading “volume and liquidity.”
The company has been in the news in recent weeks in connection with a New York attorney general investigation of multiple cryptocurrency businesses. In April, the AG's Office sent letters and questionnaires to 13 cryptocurrency companies, asking them for information about their operational controls, money laundering, and privacy practices.
Many of the companies targeted with those letters said they would comply with the AG's inquiry, but Kraken CEO Jesse Powell opted for a different approach. Powell on April 18 posted a statement on Twitter criticizing the AG's inquiry and noting that the company had exited the New York market in 2015 after the New York Department of Financial Services imposed a cryptocurrency regulatory framework and BitLicense—a special permit for virtual currency exchanges. Powell described New York as “hostile to crypto,” according to his April 18 statement.
“When I saw this 34-point demand, with a deadline two weeks out, I immediately thought, 'The audacity of these guys—the entitlement, the disrespect for our business, our time!' ” Powell said in the Twitter statement. “Then I realized we made the wise decision to get the hell out of New York three years ago and that we can dodge this bullet.”
With Buchanan now on board at Kraken, that inquiry could be one of her early focuses. She brings to the general counsel role a wealth of experience in regulatory enforcement actions. As Pittsburgh's U.S. attorney, a role she started after a lengthy career as a federal prosecutor, Buchanan oversaw the prosecution of some 5,000 cases, including a focus on child pornography and obscenity cases, according to a statement that Bryan Cave released when she joined that firm in 2013. After leaving the U.S. Attorney's Office, Buchanan joined the United Nations as its ethics and reputational risk officer before moving to Bryan Cave.
Buchanan will likely remain connected to her former firm for some period of time, however. Both the firm and Buchanan are caught up in a lawsuit as defendants. In that suit, filed April 28 in Manhattan federal court, LabMD Inc.—a medical testing company that has largely stopped operating amid legal issues—accused Buchanan of violating the Ethics in Government Act. The embattled medical testing company also alleged that Buchanan hid that violation by advising a whistleblower client to give incomplete testimony in a Federal Trade Commission enforcement action.
Several weeks after the case was filed against Bryan Cave and Buchanan, Richard Wallace, the former FTC whistleblower client referenced in the LabMD suit, contacted ALM with a statement that disputed LabMD's claims. Wallace, who is not a party to the LabMD suit, said it “saddens” him that LabMD filed the suit against his former lawyers, who, in his view, did quality legal work on his behalf.
“I have read the irresponsible and reckless allegations in the complaint filed … against Bryan Cave Leighton Paisner LLP and Mary Beth Buchanan. None of the allegations contained in the complaint are true,” Wallace said in a May 22 statement. “The false allegations contained in the lawsuit are upsetting because Bryan Cave Leighton Paisner LLP and Ms. Buchanan's legal representation on my behalf was always outstanding.”
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