SEC Fights Back Against Kraken
Announcing that it had charged “Payward Inc. and Payward Ventures Inc., together known as Kraken, with operating Kraken’s crypto trading platform as an unregistered securities exchange, broker, dealer, and clearing agency,” the U.S. Securities and Exchange Commission (SEC) confirmed its second lawsuit against Kraken this year.
The lawsuit filed on Monday alleges that “Kraken intertwines the traditional services of an exchange, broker, dealer, and clearing agency without having registered any of those functions with the Commission as required by law.” The SEC further accused Kraken of business practices, internal control deficiencies, and poor recordkeeping practices. The watchdog is seeking “injunctive relief, conduct-based injunctions, disgorgement of ill-gotten gains plus interest, and penalties.”
Kraken Defends Itself
In response to the SEC’s lawsuit announcement, Kraken issued a statement, expressing its disagreement with the claims and stating its intention to defend its position in court. The company emphasized that the complaint against Kraken alleges no fraud, market manipulation, customer losses due to hacking or compromised security, or breaches of fiduciary duty. Kraken CEO Dave Ripley also posted on social media platform X: “We strongly disagree with the SEC claims, stand firm in our view that we do not list securities, and plan to vigorously defend our position.” The crypto trading platform does not intend to register with the SEC despite the agency’s claims.
Hot Take: Kraken vs. SEC
The SEC is once again taking on Kraken in court, alleging that the crypto trading platform operates as an unregistered securities exchange, broker, dealer, and clearing agency. Kraken, however, disagrees and plans to vigorously defend its position. This legal battle demonstrates the ongoing struggle between cryptocurrency companies and financial regulators, raising questions about the future of crypto regulation in the United States.
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