The U.S. SEC has reportedly launched a securities violations investigation against the cryptocurrency exchange Kraken.
The said investigation is reported to be in the “advanced stage” and “could lead to a settlement in coming days,” per sources. Kraken, a digital assets exchange enabling customers to buy and sell cryptocurrencies, per CoinGecko data, by daily volume, Kraken is the fourth largest crypto exchange.
Reportedly in November, owing to violations of sanctions against Iran, Kraken attracted a penalty from the U.S. Treasury Department’s Office of Foreign Assets Control totaling $362,158.70. Dave Ripley, CEO, Kraken, had reportedly said in September that while the SEC had labeled various coins or tokens as securities, Kraken will not delist any cryptocurrency.
Federal authorities have been chasing cryptocurrency exchanges for apparent violations for quite a while now. In January, the SEC eyed Genesis and Gemini for offering unregistered securities. Gary Gensler, Chairman, SEC, claims most cryptocurrencies barring Bitcoin are unregistered securities. Essentially an investment tool, via a security, capital is raised in public and private markets.
The SEC has lately been actively attempting to regulate the Cryptoverse. In 2022, the SEC initiated 30 crypto-centric enforcements, up 50% against 2021. While Chairman Gensler says the Cryptoverse is “significantly non-compliant,” he signals that laws having the intention of protecting consumers do exist, but cautions the dire need of doing even more to protect investors.
U.S. regulators are keeping a close watch on digital asset exchanges, particularly the following the infamous FTX debacle in 2022.
Placed among one of the largest cryptocurrency exchanges in the world, FTX allegedly criminally mismanaged investors’ funds. FTX’s former CEO and co-founder, Sam Bankman-Fried, has eight criminal charges to his record—this also includes wire fraud on customers and conspiring to launder money.
