SEC believes that Kraken may have violated securities laws

BestChange
2 min readNov 21, 2023

The SEC filed a lawsuit against the Kraken crypto exchange. The regulator believes that the company could have violated securities legislation by equating some digital currencies presented on the platform with them.

The statement of claim states that the commission considers Cardano, Solana, Dash, Polygon and several other crypto assets to be unregistered securities. The regulator accused Kraken of becoming a broker, dealer, trading platform and clearing agency in relation to these digital coins. However, the company does not have the necessary permits and registration.

“By doing so, Kraken creates risks for investors and receives billions of dollars in fees and trading profits without complying with or even recognizing the requirements of U.S. securities laws designed to protect investors,” the SEC complaint states.

The Commission believes that the business style, internal controls and accounting of a cryptocurrency exchange “create additional risks for investors” and such activities “would be prohibited for any duly registered securities intermediary.”

Kraken considered the regulator’s latest persecution of a cryptocurrency company “wrong” and “detrimental.” According to representatives of the platform, filing a lawsuit will not affect the project’s activities in any way.

Previously, the SEC had already sued Kraken, equating its staking service to remuneration from unregistered securities. The company was forced to suspend the provision of services to US customers and also paid a $30 million fine.

What do you think about the SEC’s latest persecution of cryptocurrency market participants?

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