- SEC charges Kraken for alleged unregistered operations, sparking a legal battle.
- Kraken vehemently denies SEC’s claims, vows to defend its position in court.
- Crypto industry watches closely as SEC lawsuits test regulatory boundaries.
In a significant development, the Securities and Exchange Commission (SEC) has filed a complaint against Payward Inc. and Payward Ventures Inc., collectively known as Kraken. The legal watchdog accuses them of operating Kraken’s crypto trading platform as an unregistered securities exchange, broker, dealer, and clearing agency.Read CRYPTONEWSLAND on google news
The SEC alleges that since at least September 2018, Kraken has unlawfully facilitated the buying and selling of crypto asset securities, making hundreds of millions of dollars in the process. The complaint contends that Kraken combines the functions of an exchange, broker, dealer, and clearing agency without proper registration, depriving investors of essential protections mandated by law.
Kraken, a prominent player in the crypto space, strongly disagrees with the SEC’s claims and has vowed to vigorously defend its position. The company asserts that the allegations do not align with its operations and highlights its commitment to compliance with regulatory standards.
According to the SEC’s complaint, Kraken’s alleged failure to register these functions has exposed investors to significant risks, including the lack of SEC inspection, deficient internal controls, and poor recordkeeping practices. The SEC claims that Kraken commingles customer funds and crypto assets with its own, posing potential risks of loss to its customers.
The SEC’s complaint, filed in federal district court in San Francisco, seeks injunctive relief, conduct-based injunctions, disgorgement of ill-gotten gains plus interest, and penalties. Kraken had previously agreed, in February of this year, to cease offering or selling securities through crypto asset staking services or staking programs and pay a civil penalty of $30 million.
Kraken maintains its stance on compliance and will confront the SEC’s charges in court. The outcome of this legal battle could have implications for the regulatory landscape of the broader crypto industry.
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