Kraken, one of the largest Bitcoin and altcoin exchanges by volume, is allegedly subject to scrutiny by the US Securities and Exchange Commission (SEC). The US Securities and Exchange Commission (SEC) is reportedly investigating crypto exchange Kraken for allegations of offering unregistered securities in the country. However, it is still unclear which crypto tokens or offerings are under scrutiny by the financial watchdog. Here are the details…
Bitcoin exchange is on the SEC’s radar
Cryptocurrency exchange Kraken has entered the Securities and Exchange Commission (SEC) radar. The regulator is looking at whether the exchange in question offers unregistered securities to American customers. A February 9 report from Bloomberg claimed that the investigation had reached an “advanced stage.” Details remain unclear, but an agreement could be reached soon. Securities are considered higher risk because they are not subject to the same level of regulatory oversight as other financial instruments.
However, Kraken’s new CEO, Dave Ripley, did not register with the SEC, despite calls from chairman Gary Gensler for crypto platforms to do so. Binance, the largest crypto exchange, has also faced backlash for trading unregistered securities. If the SEC finds that securities laws have been violated, the investigation may lead to fines, penalties or other penalties.
Other crypto companies could also suffer
A deal with the SEC could pressure other cryptocurrency companies to negotiate with regulators. According to market data, the cryptocurrency exchange Kraken, headquartered in San Francisco and with a daily trading volume of over $650 million worldwide, is the third largest cryptocurrency exchange in the world. The company claims to support more than 185 different cryptocurrencies on its website, but it’s unclear how many of these cryptocurrencies can actually be traded by customers in the US.
Also, the crypto market suffered a severe winter last year after the collapse of institutions like FTX. This affected many exchanges, including Kraken. The platform recently laid off 30 percent of its workforce. This firing process is allegedly independent of events such as the FTX explosion.
Kraken’s previous battles with regulators
As we reported on Kriptokoin.com, in late 2017 Kraken reached a settlement with the Treasury’s Office of Foreign Assets Control over alleged violations of US sanctions against Iran. This deal had nothing to do with the original claims. As part of the settlement, the company has committed to pay a little over $360,000 and an investment of $100,000 to comply with the sanctions. OFAC reported that at the time, Kraken willingly informed the government of suspected violations and cooperated with the investigation into the matter.
Kraken exchange appears to be in a state of uncertainty, as is the ongoing SEC investigation. It ended operations in Abu Dhabi less than a year after it was recently granted a local license. It previously stopped doing business in Japan, citing weakening demand for cryptocurrency combined with the country’s increasingly stringent regulatory environment.
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