Kraken Faces SEC Charges for Unlawful Crypto Trading Operations
The U.S. Securities and Exchange Commission (SEC) has added Kraken – a San-Francisco-based crypto exchange – to its hitlist of industry giants charged...
- The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Kraken, a San Francisco-based crypto exchange, for failing to register as a securities exchange, broker, dealer, and clearing agency.
- The SEC claims that Kraken's failure to register has deprived investors of important protections, such as inspection by the SEC, recordkeeping requirements, and safeguards against conflicts of interest.
- The allegations against Kraken are similar to those made against Coinbase and Binance in June, accusing them of operating unregistered securities exchanges.
- Kraken is accused of listing tokens that are considered investment contracts on a case-by-case basis, including ADA, SOL, MATIC, ALOG, MANA, and OMG.
- The SEC also criticizes Kraken for its poor recordkeeping practices, alleging that customer funds were commingled with corporate accounts and used to pay operational expenses.
- Kraken has dismissed the SEC's accusations and criticized the agency for not providing a clear path to registration for crypto firms.
- Kraken co-founder Jesse Powell has criticized the SEC, referring to them as the "USA's top decel" and "masochists" for their previous court defeats against crypto firms.
- In February, Kraken paid a $30 million fine to the SEC to settle charges related to its unregistered staking-as-a-service product.
The sentiment in the article is negative towards the SEC's accusations and actions against Kraken.