{"id":87293,"date":"2023-11-21T10:33:38","date_gmt":"2023-11-21T08:33:38","guid":{"rendered":"https:\/\/forklog.com\/en\/?p=87293"},"modified":"2025-09-13T10:53:33","modified_gmt":"2025-09-13T07:53:33","slug":"sec-sues-kraken-over-lack-of-registration","status":"publish","type":"post","link":"https:\/\/forklog.com\/en\/sec-sues-kraken-over-lack-of-registration\/","title":{"rendered":"SEC sues Kraken over lack of registration"},"content":{"rendered":"

The U.S. Securities and Exchange Commission (SEC) has filed suit<\/a> against Kraken’s parent companies for failing to register as a trading platform.<\/p>\n

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\u201cKraken acted as a broker, dealer, exchange, and clearing agency in relation to securities. [\u2026] The platform [\u2026] earned billions of dollars in fees [\u2026] without complying with [\u2026] the requirements of U.S. securities laws [\u2026] designed to protect investors,\u201d<\/em> the suit states.<\/p>\n<\/blockquote>\n

The filing also asserts that Kraken’s business practices, internal controls and record-keeping posed additional risks.<\/p>\n

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\u201cBy failing to prevent conflicts of interest and merging user crypto assets worth $33 billion with its own, Kraken demonstrates why registration and investor protection [\u2026] are essential to the resilience of the U.S. capital markets,\u201d<\/em> the SEC said.<\/p>\n<\/blockquote>\n

The agency highlighted the auditor\u2019s statement that there was a \u201csignificant risk of loss\u201d of client funds. In particular, officials noted that part of operating expenses were paid from bank accounts holding $5 billion belonging to users.<\/p>\n

The SEC said it seeks a court order permanently prohibiting the defendants from violating securities laws and ordering disgorgement of the ill-gotten gains.<\/p>\n

The plaintiff also seeks to bar Kraken from acting as an unregistered exchange, broker, dealer or clearing agency.<\/p>\n

The regulator named a list of tokens it considered unregistered investment contracts, including Algorand (ALGO), MATIC and NEAR. The suit alleges that Kraken was directly involved in promoting these assets.<\/p>\n

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\u201cWe strongly disagree with the SEC\u2019s allegations, we remain firm in our view that we do not list securities, and we intend to vigorously defend our position,\u201d<\/em> said Kraken chief David Ripley.<\/p>\n<\/blockquote>\n

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We strongly disagree with the SEC claims, stand firm in our view that we do not list securities, and plan to vigorously defend our position.<\/p>\n

As we have seen before, the SEC argues that @krakenfx<\/a> should \u201ccome in and register\u201d with the agency, when there is no clear path to\u2026<\/p>\n

\u2014 Dave Ripley (@DavidLRipley) November 21, 2023<\/a><\/p><\/blockquote>\n