US regulators indict cryptocurrency exchange “Kraken”

The U.S. Securities and Exchange Commission (SEC) on Monday filed a federal lawsuit accusing the world’s third-largest cryptocurrency exchange of operating without regulatory approval.

The financial markets regulator’s action against Kraken is likely to put a damper on the hopes of many companies in the sector that they will ease up on the regulatory gas pedal following a series of adverse court decisions.

In June, the SEC took legal action against Binance, the world’s leading cryptocurrency exchange, and runner-up Coinbase.

The lawsuit against Kraken began Monday in federal court in San Francisco and targets Payward and Payward Ventures, the two entities that operate the exchange.

According to the SEC, the site, which recently celebrated its 10th anniversary, “integrates the traditional services of exchanges, brokers, dealers, and clearinghouses without registering any of the functions required by law with the European Commission. It is said that

Regulators said the failure to register “deprived investors of important protections” that should have included SEC inspections, record-keeping requirements and conflict-of-interest safeguards.

Authorities also accused Kraken of commingling customer funds with its own funds to pay operating costs.

According to the SEC, the company’s auditors reported that there was a “significant risk of loss” to customers as a result of these actions.

SEC Enforcement Director Gurbir Grewal said in a statement that Kraken’s business model is “rife with conflicts of interest that put investors’ money at risk.”

In a message posted on its website, Kraken disputed the charges in the SEC’s lawsuit and argued it did not need to register with regulators.

“While we disagree, we intend to vigorously defend our position in court,” the company said.

“Today’s news has no impact on the products we offer and we continue to serve our customers without interruption,” it added.

The world of cryptocurrencies has recently come back to life, with observers predicting the SEC will give the green light to new forms of products for investing in cryptocurrencies.

The product, known as an exchange-traded fund (ETF), is an index fund invested in cryptocurrencies that democratizes investing in digital currencies by allowing investors to buy and sell at any time without going through a dedicated exchange platform. There is a possibility that

The SEC’s stance may soften after the regulator suffered two legal setbacks in October that undermined its stated desire to establish itself as a crypto benchmark authority. I had high hopes that this would happen.


Leave a Reply

Your email address will not be published. Required fields are marked *