U.S. SEC charges crypto exchange Kraken with illegal operations

Asian Tech Press (Nov 22) -- The U.S. Securities and Exchange Commission (SEC) on Monday filed a complaint in the U.S. federal court in San Francisco, accusing crypto exchange Kraken of illegally operating a securities exchange without registration.

Kraken said it would defend itself and said the U.S. Congress should enact legislation to regulate cryptocurrency exchanges, adding that SEC's stance on digital assets is "incorrect as a matter of law, false as a matter of fact, and disastrous as a matter of policy."

And the crypto exchange also said the lawsuit does not affect its more than 10 million users.

In the complaint, the SEC states that Payward Inc. and Payward Ventures Inc, which operated Kraken's crypto trading platform, arranged for the purchase and sale of hundreds of millions of dollars of cryptocurrencies since 2018 and disregarded U.S. securities laws that protect investors.

It also alleges that Kraken had deficient internal controls and poor recordkeeping practices, reflecting the mixing of its own cash with customers and paying operating costs directly from customer accounts.

Kraken's failure to register also resulted in a conflict-of-interest business model that put investor funds at risk, the SEC said.

Related Topics

You must be login to post a comment.