The Securities and Exchange Commission accused crypto exchange Kraken of securities-law violations, less than a year after unveiling a $30 million settlement with the firm over other alleged conduct.
In its latest salvo against the crypto sector, the regulator claimed Monday that Kraken commingled customer assets with its own and at times paid expenses from bank accounts that held customer cash.
The SEC also argued that the firm was operating as an exchange, broker, dealer and a clearing agency — all without the proper registration. The agency has sued the Coinbase and Binance digital-asset platforms for similar alleged failures, accusations both companies dispute.
“We allege that Kraken made a business decision to reap hundreds of millions of dollars from investors rather than coming into compliance with the securities laws,” Gurbir Grewal, the SEC’s enforcement chief, said in a statement. “That decision resulted in a business model rife with conflicts of interest that placed investors’ funds at risk.”
In 2020 and 2021 combined, Kraken had more than $43 billion in revenue from trading-based transactions, the complaint alleged.
In a post on X, formerly known as Twitter, Kraken said it disagreed with the SEC claims and planned to “vigorously defend” its position.
“The SEC has repeatedly challenged crypto exchanges to come in and register without a single law supporting their position and no clear path to registration,” Kraken wrote.
Today, the SEC filed a complaint alleging that Kraken operates as an unregistered national securities exchange, broker, and clearing house. We disagree with their claims and plan to vigorously defend our position. https://t.co/a0C4wzBo3f
— Kraken Exchange (@krakenfx) November 21, 2023
TheRead more on investmentnews.com