- The probe is related to some services Kraken provided to customers.
- U.S. regulators are closely observing digital asset exchanges.
The Securities and Exchange Commission (SEC) is investigating Kraken, one of the biggest cryptocurrency exchanges in the world. SEC to examine whether regulations broken in some of its sales to American investors. The inquiry is related to some services Kraken provided to customers in the United States.
The exchange has already been the target of federal authorities’ accusations of wrongdoing. Kraken agreed to pay $362,158.70 to the Office of Foreign Assets Control of the U.S. Treasury Department in November for alleged sanctions violations against Iran. Previously, SEC Chair Gary Gensler warned that firms that assist in transaction facilitation in the cryptocurrency market should register with an organization similar to other traders.
This Isn’t the First Time
In September, Kraken’s incoming CEO Dave Ripley indicated that the exchange had no intentions to delist any cryptocurrencies or tokens that the SEC has classified as securities. According to certain sources, a settlement between the exchange and the SEC may be reached in the upcoming days as the investigation is reportedly far along. Enforcement actions may not always follow an investigation by the SEC.
Gary Gensler, the chairman of the SEC, believes that a variety of cryptocurrencies but not Bitcoin are unregistered securities. An investment tool known as security is used to fund raises in both public and private markets.
Cryptocurrency exchange Poloniex LLC and the SEC settled in 2021 on allegations that they ran an unlicensed exchange for digital assets. Following the collapse of the large firm FTX last year, U.S. regulators are keeping a close eye on digital asset exchanges. The SEC imposed sanctions against Genesis and Gemini in January for promoting unregistered securities.
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