The post Kraken Becomes Latest Crypto Trading Giant Targeted in Battle With SEC appeared on BitcoinEthereumNews.com.

The Securities and Exchange Commission filed a lawsuit against cryptocurrency exchange Kraken on November 21st, 2023, accusing the company of operating an unregistered securities trading platform. According to the SEC, Kraken enabled users to trade digital assets that should have been registered as securities under U.S. law. Keypoints The SEC filed a lawsuit against crypto exchange Kraken, accusing it of operating an unregistered securities trading platform. Kraken allegedly acted as a broker, dealer, exchange, and clearing agency without proper SEC registration. The SEC claims Kraken traded numerous tokens that should be registered as securities, including Algorand, Polygon, and NEAR. The lawsuit alleges Kraken improperly commingled customer assets with corporate assets, creating significant risk. Kraken disputes the claims, arguing Congress should provide regulatory clarity rather than the SEC’s “regulation by enforcement.” Specifically, the regulator alleges that popular tokens like Algorand, Polygon’s MATIC token, and NEAR meet the legal definition of a security. By facilitating trades in these assets without properly registering with the SEC, Kraken violated securities regulations. The exchange also allegedly operated as an unregistered broker-dealer and took in billions of dollars in fees without adhering to critical investor protection rules. The lawsuit further claims that Kraken improperly commingled customer assets with corporate assets, presenting unnecessary risks. According to the filing, Kraken held over $33 billion in customer cryptocurrency, pooled together with its own corporate crypto holdings. The SEC argues this comingling creates significant loss potential for customers. Similarly, Kraken allegedly used bank accounts holding over $5 billion in customer cash to pay for operational expenses. In response, Kraken maintains it does not list any securities and plans to vigorously contest the lawsuit. The company accused the SEC of overstepping its authority and harming innovation through aggressive legal action rather than clear rulemaking. Kraken argues Congress should step in to…

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Filed under: News - @ November 21, 2023 12:16 pm