Giant

In yet another anti-crypto enforcement action, the US Securities and Exchange Commission (SEC) charged Kraken with operating its crypto trading platform as an unregistered securities exchange, broker, dealer, and clearing agency. In response, the crypto exchange disagreed with the complaint, stating plans to ‘vigorously defend’ its position in court. 
Also Read: <a href="https://coingape.com/canada-wants-public-feedback-to-enshrine-crypto-regulation" target="_blank" rel="noopener">Canada Wants Public Feedback to Enshrine Crypto Disclosures</a> 
<h2 id="operating-as-unregistered-securities-exchange">Operating As ‘Unregistered’ Securities Exchange</h2> 
The US agency complained that over the last five years and possibly prior to that, Kraken unlawfully made hundreds of millions of dollars in its crypto trading business. While the agency’s view of crypto buying and selling as an act of crypto asset ‘securities’ has long been contested, the SEC continues to enforce law based on the same ambiguity. In its complaint dated November 20, 2023, the Commission <a rel="nofollow" href="https://www.sec.gov/news/press-release/2023-237" target="_blank">said</a>, 
<blockquote>
 “The SEC alleges that Kraken intertwines the traditional services of an exchange, broker, dealer, and clearing agency without having registered any of those functions with the Commission as required by law.”
</blockquote> 
By operating as an unregistered entity, Kraken had allegedly deprived investors of significant protections, including inspection by the SEC, recordkeeping requirements, and safeguards against conflicts of interest, the SEC said in its complaint. 
<h2 id="commingling-customer-money">“Commingling Customer Money”</h2> 
Further, the US SEC argued that the crypto exchange had commingled customers money as well as crypto assets with its own operational funds. The complaint said Kraken allegedly paid operational expenses directly from accounts that hold customer cash. The exchange’s auditor had itself identified these observations as “a significant risk of loss” to its customers, it added. 
The exchange had in statement <a rel="nofollow" href="https://blog.kraken.com/news/kraken-continues-to-fight-for-its-mission-and-crypto-innovation-in-the-united-states" target="_blank">said</a> it disagrees with the charges and intends fight it out in court, in what could be the beginning of a long drawn crypto lawsuit against the SEC. 
Also Read: <a href="https://coingape.com/ai-giant-nvidia-openly-woos-openai-staff-as-leadership-saga-rages-on" target="_blank" rel="noopener">AI Giant NVIDIA Openly Woos OpenAI Staff as Leadership Saga Rages On</a> 
The post <a rel="nofollow" href="https://coingape.com/kraken-lawsuit-us-sec/">US SEC Files Lawsuit Against Kraken, Exchange Calls It Disastrous</a> appeared first on <a rel="nofollow" href="https://coingape.com">CoinGape</a>.

US SEC Files Lawsuit Against Kraken, Exchange Calls It Disastrous

Table of Contents

Coingape News Media

Other articles published on Nov 21, 2023

🗒 Daily Newsletter | Tuesday, November 21st, 2023

US Department of Justice to Announce Crypto Sanctions: Could Be Critical for Binance Exchange!

The Battle of Memes: Wall Street, Doge Killer, and the GameStop Memes

How Do You Know If Crypto is Trustworthy? Just Look to the Exchanges Dealing With Them

Injective Price Prediction 2023-2028: Can INJ Conquer $50 By 2028?

Arbitrum (ARB) Whales Are Selling Fast: Big Price Correction Ahead?

Join our free newsletter for daily crypto updates!