SEC Sues Kraken for Operating Unregistered Cryptocurrency Trading Platform
The United States Securities and Exchange Commission has turned its attention to Kraken, a US-based cryptocurrency exchange, in its ongoing regulatory crackdown. The SEC has filed a lawsuit against Kraken, alleging that it has operated an unregistered trading platform for digital currency assets, generating substantial fees and trading revenue without adhering to securities laws designed to protect investors.
SEC Targets Kraken In Ongoing Cryptocurrency Crackdown
The complaint against Payward Inc. and Payward Ventures Inc., the entities behind Kraken, states that Kraken has violated securities laws by failing to register as an exchange, clearing agency, and broker-dealer. This comes after a legal case with the SEC in February 2023, where Kraken agreed to discontinue an unregistered offering and sale of a cryptocurrency asset staking-as-a-service program.
Collins Belton, a pro- cryptocurrency lawyer, believes that the recent SEC case against Kraken echoes similar states made against Coinbase. The SEC states that certain assets traded on Kraken are securities, thus alleging that Kraken operates an unregistered exchange.
Cryptocurrency Exchange Battle
The lawsuit against Kraken adds to the regulatory pressures faced by major digital currency exchanges like Coinbase and Binance. The case likewise raises concerns about the exchange’s internal practices and the capacity impact on the broader cryptocurrency industry and future regulatory approaches.
Currently, Kraken has not officially responded to the SEC’s lawsuit, leaving numerous questions about the case’s impact on the industry.
Hot Take: Kraken’s Legal Battle with the SEC
The lawsuit filed against Kraken by the SEC is just the latest legal battle in the ongoing effort to regulate the cryptocurrency industry in the United States. The outcome of this case will certainly have implications for how exchanges operate and how regulators approach their oversight of the industry. The verdict will undoubtedly be eagerly anticipated by everyone with an interest in future of the cryptocurrency trading in the United States. Kraken’s response and the SEC’s approach to the case will be closely watched by cryptocurrency enthusiasts, market analysts, and SEC-watchers alike.
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