SEC Probes Kraken Over Securities Law Violations: Settlement May Near
- The SEC is probing crypto exchange Kraken for possibly violating U.S. securities law by offering unregistered securities.
- If Kraken settles with the regulator, the SEC could potentially gain more jurisdiction over the crypto industry.
- The SEC has mainly focused on enforcement without publishing a clear guideline for regulating crypto assets in the U.S.
SEC Tightens Enforcement
The U.S. Securities and Exchange Commission (SEC) is tightening its enforcement efforts and probing crypto exchange Kraken for possible breach of U.S. securities law by offering unregistered securities to its customers in the United States. The probe has reached advanced stages and a conclusion is expected to be announced in the next few days. If Kraken settles with the regulator, it could potentially result in fines, penalties or other consequences for violating securities laws, as well as give more power to the SEC to regulate cryptocurrency tokens in America.
Kraken’s Offerings Under Scrutiny
Kraken currently offers more than 185 cryptocurrencies globally, many of which are not offered in the United States. It remains unclear which specific offerings are being scrutinized by the securities regulator during this probe, but reports suggest that the investigation is focusing on whether or not certain tokens qualify as unregistered securities under existing laws and regulations.
Main Goal of Regulating Crypto
In December 2020, Gary Gensler, Chairman of the SEC said that their main goal for regulating crypto throughout 2021 was to make exchanges and lending platforms comply with applicable rules and regulations regarding investments and financial services products such as digital assets like Bitcoin (BTC).