As the crypto market is reviving, many regulatory authorities have been alarmed watching the crypto-related activities. As usual, the US Securities and Exchange Commission is marinating strict check and balances. Recently, the US SEC has sued a US-based leading centralized cryptocurrency exchange, Kraken for selling unregistered securities and mishandling the funds of the customers.
Kraken is the leading centralized exchange based in the United States with global fame. It is the first time that the SEC has sued the centralized and Web3-based entity alleging unregistered securities and commingling with the funds of the customers. Kraken has refused the alleged violations and assured that the crypto exchange with face the SEC and its operations will continue without any interruption.
SEC’s Claims against Kraken
On 20th of November 2023, the SEC filed a complaint against Kraken and accused it as an unregistered broker, dealer and clearing agency which put customers’ funds at risk. In the complaint, Kraken has been held responsible for commingling approximately $33 billion worth of cryptocurrencies of the customers for its own sake.
SEC officials asserted that Kraken holds more than $5 billion of cash from customers and commingles that with its assets. Moreover, Kraken has been paying its operational expenses from the accounts of the customers in the centralized banks. Moreover, the SEC claimed that Kraken has been involved in the unregistered and unlicensed trade securities of ALGO, NEAR, and MATIC Tokens. For this, the US SEC seeks to halt the functionality of the exchange and impose a penalty.
Kraken Reacts to SEC’s Claims
In a statement published on the official page, Kraken rejected the accusations by calling it part of exaggerations and vowed to fight the SEC over this case. Kraken said that the exchange has committed no fraud, no market manipulations and not even commingling with the funds of customers. Although Kraken has accepted some technicalities but is determined to fight against the SEC over this case.
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