The US SEC sues cryptocurrency exchange Kraken
The regulator alleges that Kraken operated as an unregistered broker, clearing agency, and dealer. The agency seeks to permanently ban Kraken from operating as an unregistered exchange, impose fines, and require the return of ill-gotten gains.
Cryptocurrency exchange Kraken is being sued by the US Securities and Exchange Commission (SEC) for allegedly violating federal securities laws. The SEC claims that Kraken mixed customer and corporate funds, combining up to $33 billion in customer cryptocurrency with its own assets. According to the SEC, Kraken also held over $5 billion of customers’ cash at times and mixed it with its own funds. These actions are said to breach federal securities laws.
This lawsuit against Kraken follows similar legal actions taken by the SEC against other cryptocurrency trading platforms, including Binance and Coinbase. All three platforms are accused of operating as unregistered brokers, clearing agencies, and dealers.
In response, Kraken has declared its disagreement with the SEC‘s complaint and intends to vigorously defend its position. The company emphasizes that it does not list securities. Kraken asserts that congressional action is needed to address the lack of regulatory clarity in the US.
Why does it matter?
This development highlights the ongoing regulatory scrutiny faced by cryptocurrency exchanges in the US. The outcome of the lawsuit against Kraken will likely have significant implications for the wider cryptocurrency industry.