Breaking: SEC cracks down on Kraken’s offering of unregistered securities
According to reports, the U.S. Securities and Exchange Commission has been investigating Kraken crypto exchange for potential violations of offering unregistered securities within the country. The financial watchdog is still not able to determine which crypto tokens and offerings are being under scrutiny.
Kraken Under SEC Scanner
According to the latest report, the investigation into Kraken is in its advanced phase. It is possible that a settlement will be reached in days to come. Kraken could face serious consequences if the United States takes any action against it after the collapse of FTX in late 2013.
A settlement with SEC could put pressure on other cryptocurrency companies to reach agreements with the regulator. The regulator has repeatedly stated that most tokens traded are securities and should be subject to its rules. Although investigations by the SEC don’t always result in enforcement actions, they can lead companies and individuals to be fined and face other consequences.
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According to market data, Kraken, a cryptocurrency exchange based in San Francisco, has a daily trading volume exceeding $650 million worldwide. Although the company claims it supports more than 185 cryptocurrencies, it is not clear how many of those cryptocurrencies can be traded by customers in the United States.
Earlier Bouts with Authorities
Late 2017, Kraken settled with the Office of Foreign Assets Control of the Treasury for claims that it had violated US sanctions on Iran. This settlement was not related to the original allegations. The agreement included a payment of approximately $360,000 and a $100,000 investment in sanctions compliance. OFAC reported that Kraken had cooperated with the investigation into the matter and willingly disclosed the suspected infractions to the government.
The SEC is also investigating Coinbase Global Inc., a rival to Kraken, for its token listing. CoinGape has previously reported on this investigation. The agency has not accused Coinbase of providing unregistered securities. However, it did identify some tokens on the exchange in a complaint against a former Coinbase employee.
The Kraken exchange seems to be in uncertainty following its decision to close its Abu Dhabi offices less than one year after it was granted a license. It also stopped doing business in Japan earlier, citing the declining demand for cryptocurrency and the stricter regulatory environment.
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