The U.S. Securities and Exchange Commission (SEC) is suing the Kraken crypto exchange, claiming that the platform has operated as an unregistered securities exchange, broker, dealer, and clearing agency since at least September 2018. According to the SEC’s complaint, Kraken has allegedly made hundreds of millions of dollars unlawfully facilitating the buying and selling of crypto asset securities. Additionally, the commission is charging Kraken with providing a marketplace that brings together the orders for securities of multiple buyers and sellers, engaging in the business of effecting securities transactions for the accounts of Kraken customers, buying and selling securities for its own account, and serving as an intermediary in settling transactions in crypto asset securities by Kraken customers. The SEC also claims that Kraken’s business practices put its customers’ personal and financial information at risk.
This is bad news for Kraken as the SEC is attempting to hold them accountable for their alleged misconduct. Gurbir S. Grewal, the director of the SEC’s Division of Enforcement, has released a statement on the decision to sue the crypto exchange. The lawsuit was filed in San Francisco, CA. Earlier this year, Kraken had already agreed to cease offering or selling securities through crypto asset staking services or staking programs and pay a civil penalty of $30 million. Kraken has yet to comment on the SEC’s lawsuit.
This is a troubling development for the crypto industry and a reminder that exchanges must comply with the law and adhere to good business practices.
You can read more about this topic here: Watcher Guru: SEC Sues Kraken crypto exchange