Kraken hires coauthor of controversial SAFT whitepaper to lead legal team

Marco Santori, best known for spearheading the simple agreement for future tokens, or SAFT, while he was a top partner at Cooley LLP, has joined Kraken as part of the crypto exchange’s growing legal team. 

The San Francisco firm made the announcement Monday in a blog post, which featured a question and answer interview with Santori. According to the post, as the firm’s new chief legal officer, Santori will use his experience to “drive the next phase” of Kraken’s growth.

A once popular idea for launching an initial coin offering, or ICO, while purportedly complying with US securities laws and regulations, SAFTs were used by several companies, including FileCoin, Kik and Telegram to raise hundreds of millions, even billions of dollars, in funding. 

But since then, SAFT has gone on to receive a fair bit of criticism. Both Kik and Telegram are currently in the crosshairs of the SEC over alleged violations of securities laws in connection with their token sales. And a recent ruling in the SEC v. Telegram case may have put a final nail on the coffin for the framework. Nevertheless, the coauthor of the controversial workaround for ICO fundraising will now lead the crypto exchange’s legal efforts.

Santori’s foray into the crypto world began in 2012, when he first got interested in Bitcoin. Soon after that, he joined the Bitcoin Foundation, where he began advising clients on crypto regulation. “What started as a get-rich-quick lark turned out to be a career-making decision,” Santori said in the Kraken blog post.

In November 2016, Santori joined Cooley. After co-authoring the SAFT white paper nearly a year later, he left the firm in early 2018 to become chief legal officer at digital wallet startup Blockchain, where he worked until recently.

At his newest engagement, Santori will have his work cut out for him. Kraken is headed by the outspoken CEO Jesse Powell, who views himself as “the voice of reason” when it comes to standing up to regulators. And navigating regulatory requirements has gotten a lot trickier.

Early on, he reflects in the Kraken blog post, “There was no regulatory guidance and no laws specifically written for digital currency. Now there is, of course, a great multitude of networks, a growing body of regulatory guidance, and even crypto-specific laws.”

In the early days of cryptocurrency, Santori recalls that most regulators and policymakers struggled to find any redeeming qualities in decentralized networks. Now the “fundamental challenge isn’t really that regulators don’t understand it; it’s that the industry itself hasn’t yet come to agreement,” he said.

As for Powell, he told Decrypt in an email Monday that his firm was looking for an industry veteran, someone who grasped the regulatory requirements of the crypto space. Santori fits the bill. "The credibility Marco has built with key industry players will help Kraken and the industry as a whole level up," he said.

Editor's note: This article was updated after it was published to include comments from Kraken CEO Jesse Powell.