U.S. SEC To Probe Crypto Exchange Kraken Over Sale of Unregistered Securities
On Wednesday, February 8, Bloomberg reported that the US Securities and Exchange Commission (SEC) shall be probing America-based crypto exchange Kraken over the alleged sale of unregistered securities.
People familiar with the matter said that the investigation has reached an advanced stage and Karen will settle with the SEC in the coming days. As per the report, the top securities agency is investigating whether Kraken broke the securities laws in their offerings to American customers. Since the case hasn’t been made public, the tokens and offerings under scrutiny are currently unknown.
The US SEC has always advised that settling with the regulator would make other crypto firms reach out to the securities agency for registering deals. Back in December 2022, SEC Chair Gary Gensler requested crypto firms to registered with the securities watchdog stating that the runway was getting shorter.
The SEC Chair believes that all crypto assets except Bitcoin are securities. He also strongly believes that most crypto exchanges have been offering unregistered securities while violating the federal laws.
San Francisco-based crypto exchange Kraken is currently the No. 3 crypto exchange with daily trading volumes of roughly $650 million globally. The exchange supports trading for more than 185 digital assets, however, it isn’t clear how many of them are available within the US jurisdictions.
Last year, Kraken faced charges of violating US sanctions against Iran and offering its services in the banned country. Later, the crypto exchange reached a settlement with the Treasury’s Office of Foreign Assets Control paying more than $360,000 in penalties. Besides, the exchange decided to invest an additional $100,000 as part of the sanctions compliance. The OFAC noted that Kraken had voluntarily disclosed the violations and had cooperated with the investigation.
Ever since the collapse of crypto exchange FTX that led to a $32 billion fall of the entire empire, the SEC has been extra vigilant dealing with crypto exchanges. Along with crypto exchange Kraken, the US SEC has also ruffled feathers with crypto exchange Coinbase over its token listings.
In its previous lawsuit against Coinbase, the securities regulator accused Coinbase of offering unregistered securities and violating the securities laws.