SEC Files Lawsuit Against Kraken for Operating Unregistered Crypto Trading Platform
The US Securities and Exchange Commission (SEC) has filed a lawsuit against the US-based crypto exchange Kraken, accusing it of operating an unregistered trading platform for cryptocurrency assets, reports Reuters.
The complaint alleges that Kraken has generated substantial fees and trading revenue without adhering to securities laws designed to protect investors.
SEC Targets Kraken In Ongoing Crypto Crackdown
In the complaint against Payward Inc. and Payward Ventures Inc., the entities behind Kraken, the SEC claims that Kraken has violated securities laws by failing to register as an exchange, clearing agency, and broker-dealer.
The SEC also alleges the commingling of funds and highlights internal practices that raise concerns.
According to pro-crypto lawyer Collins Belton, the recent SEC case against the exchange appears to echo similar allegations made against Coinbase. The SEC claims that certain assets traded on Kraken are securities, thereby asserting that Kraken operates an unregistered exchange.
Crypto Exchange Battle
The SEC’s lawsuit against the company adds to the growing regulatory pressures faced by major cryptocurrency exchanges. With Coinbase and Binance already subject to SEC scrutiny, the legal battle with Kraken underscores the need for exchanges to navigate complex securities laws and adhere to regulatory requirements.
The allegations of commingling and internal practices raise additional concerns about the exchange’s operations.
So far, the exchange has not officially responded to the SEC’s lawsuit. It remains to be seen how the case will unfold and what impact it will have on the firm and the industry.
Featured image from Shutterstock, chart from TradingView.com
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