The United States Securities and Exchange Commission (SEC) declared the November 20 that he filed a complaint against the Kraken cryptocurrency exchange.
The regulator accused Kraken of operating an unregistered securities exchange, broker-dealer, broker-dealer and clearing agency. It alleges that Kraken has generated hundreds of millions of dollars in revenue since 2018 by illegally facilitating the buying and selling of securities without registering with the SEC, as required by law.
The SEC further stated that the company’s failure to register prevented customers from benefiting from protections such as regulatory inspections, safeguards against conflicts of interest and compliance with recordkeeping requirements. registers.
Additionally, the SEC said Kraken commingled customer and company funds, including paying operational costs from accounts holding user funds. Kraken’s own auditor reportedly identified the company’s practices as a “significant risk of loss” to users.
Although not identical in content, the complaint appears to be similar in scope to the SEC’s charges against Coinbase and Binance in June. The current complaint is 90 pages long and covers most of Kraken’s exchange and trading operations.
The SEC is seeking fines and injunctions, or restrictions on activities, through its complaint. Kraken and its co-founder Jesse Powell have not yet commented on the matter.
Kraken has already faced government action
The SEC has filed another charge against Kraken in the past. In February, he charged the company for its cryptocurrency staking service. Kraken quickly reached a $30 million settlement and agreed to stop providing staking to US customers.
Aside from these SEC charges, a case between Kraken and the Internal Revenue Service (IRS) concluded this summer. Kraken was forced to provide some, but not all, customer information that had previously been requested by the IRS. Kraken said it would hand over the required data to the tax agency in October.
Kraken handles significant trading volumes on a daily basis. Current data from Coingecko indicates that the company processed $808 million over 24 hours on November 20.