Kraken Is Being Investigated By The SEC For Unregistered Securities Listings

The SEC Is Investigating Kraken

According to Bloomberg, the inquiry is well underway and might result in a settlement shortly. Neither the regulator nor the bitcoin exchange confirmed the investigation.

The SEC is on the lookout for cryptocurrencies that may qualify as unregistered securities, as well as platforms that sell them. It has seized many such minor cryptocurrencies, most of which were fraudulent, and is also engaged in a legal battle with Ripple over the classification of XRP coins as unregistered securities.

According to Kraken's website, it provides over 185 cryptocurrencies internationally, many of which may not be available in the United States. It is unclear if the SEC is classifying some of these cryptocurrencies as unregistered securities and pursuing action against cryptocurrency producers.

A Significant Cryptocurrency Exchange

According to Coinmarketcap, Kraken is the third biggest cryptocurrency, processing around $650 million in cryptocurrency deals daily. It is one of the oldest cryptocurrency exchanges, having been founded in 2011. It is headquartered in San Francisco. Any action taken against such a corporation might have repercussions for the whole industry.

In a separate matter from the current SEC investigation, Kraken paid more than $360,000 in a monetary penalty to the US Treasury Department's Office of Foreign Assets Control (OFAC) last year for a breach of sanctions on Iran. Furthermore, the exchange committed to spending an additional $100,000 in strengthening its sanctions compliance processes.

In addition, Kraken's leadership shifted when Jesse Powell stepped down as CEO, turning over the reins to Dave Ripley. Meanwhile, the exchange is under pressure from the cryptocurrency industry and recently laid off 30% of its worldwide personnel. Furthermore, it ceased operations in Japan, citing market difficulties.

Similar SEC inquiries of Coinbase's crypto listings surfaced last year, but no enforcement action or settlement was reached. However, the SEC filed a complaint against a former Coinbase employee and two individuals for insider trading, citing numerous coins listed on the exchange as securities.

However, the US Securities and Exchange Commission is actively pursuing crypto loan schemes. The SEC and several US state authorities have reached a $45 million settlement with the crypto lending platform Nexo for promoting and selling unregistered securities. The federal watchdog even sued Gemini and Genesis, claiming that their crypto-lending products were unregistered securities.

As a reminder, WikiBit is ready to help you search the qualifications and reputation of projects in a bid to protect you from hidden dangers in this risky industry!

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