The next cryptocurrency trading giant to be targeted by the SEC is Kraken

The next cryptocurrency trading giant to be targeted by the SEC is Kraken


  • Kraken, a cryptocurrency exchange, was sued by the SEC for allegedly running an unlicensed securities trading platform.
  • Kraken is accused of operating without the required SEC registration as a broker, dealer, exchange, and clearing agency.
  • According to the SEC, Kraken traded a number of tokens, including as Algorand,Polygon, and NEAR, that ought to have been registered as securities.
  • According to the complaint, Kraken inappropriately mixed company and client funds, putting a large amount of danger.
  • Kraken refutes the allegations, claiming that Congress need to clarify regulations as opposed to the SEC's "regulation by enforcement.

On November 21, 2023, the Securities and Exchange Commission filed a lawsuit against Kraken, a cryptocurrency exchange, alleging that the business ran an unlicensed securities trading platform. The SEC claims that Kraken gave customers the ability to trade digital assets that, in accordance with US law, ought to have been registered as securities.

The regulator specifically claims that well-known tokens like NEAR, Polygon's MATIC token, and Algorand satisfy the requirements for being classified as securities under the law. Kraken violated securities laws by enabling trading in these assets without properly registering with the SEC. In addition, the exchange is accused of functioning as an unlicensed broker-dealer and collecting fees totaling billions of dollars without following important regulations protecting investors.

The complaint also alleges that Kraken created needless risks by erroneously combining client and business assets. In addition to its own corporate bitcoin assets, Kraken reportedly had over $33 billion in cryptocurrency owned by its customers. The SEC claims that consumers might suffer major losses as a result of this combination. In a similar vein, Kraken is accused of using bank accounts containing more than $5 billion in cash from customers to cover operating costs.

Kraken has responded by saying that it does not list any securities and that it intends to fight the case tenaciously. The business claimed that rather than adopting clear rules, the SEC had overreached its jurisdiction and was stifling innovation via aggressive litigation action. Congress, according to Kraken, need to intervene and establish clear regulations for cryptocurrency exchange registration.

Similar lawsuits brought this year against competitors like Coinbase and Binance are echoed by the SEC crackdown. The regulator anticipates that the court cases will force the main cryptocurrency trading platforms to comply with the securities laws already in place. But the high-profile legal fights are far from done, with politicians pushing back and the exchanges themselves putting up a tough fight.


Previous Post Next Post