SEC Sues Kraken: Crypto Exchange Plans to ‘Vigorously Defend’ Its Position in Court

The U.S. Securities and Exchange Commission (SEC) has sued cryptocurrency speech Kraken for the 2nd clip this year, alleging that the crypto trading level operates arsenic an unregistered securities exchange, broker, dealer, and clearing agency. Kraken disagreed with the securities regulator’s claims, insisting: “We bash not database securities, and program to vigorously support our position.”

SEC Sues Kraken Again

The U.S. Securities and Exchange Commission (SEC) announced Monday that it has charged “Payward Inc. and Payward Ventures Inc., unneurotic known arsenic Kraken, with operating Kraken’s crypto trading level arsenic an unregistered securities exchange, broker, dealer, and clearing agency.” This is the SEC’s 2nd suit against Kraken this year. The archetypal was successful February implicit the crypto exchange’s staking program, which Kraken agreed to pay $30 million to settle.

In its lawsuit filed connected Monday, the SEC alleged that since astatine slightest September 2018:

Kraken intertwines the accepted services of an exchange, broker, dealer, and clearing bureau without having registered immoderate of those functions with the Commission arsenic required by law.

Moreover, the SEC alleged that “Kraken’s concern practices, deficient interior controls, and mediocre recordkeeping practices contiguous a scope of risks for its customers.” The securities regulator further claimed that “Kraken commingles its customers’ wealth with its own, including paying operational expenses straight from accounts that clasp lawsuit cash.” In addition, the watchdog has accused Kraken of listing crypto securities.

The SEC is seeking “injunctive relief, conduct-based injunctions, disgorgement of ill-gotten gains positive interest, and penalties.”

Kraken Intends to Fight Back

Following the SEC’s suit announcement, Kraken issued a statement, stating: “We disagree, and mean to vigorously support our presumption successful court.” The speech detailed:

The ailment against Kraken alleges nary fraud, nary marketplace manipulation, nary lawsuit losses owed to hacking oregon compromised security, and nary breaches of fiduciary duty.

“It includes large dollar amounts but does not allege a azygous 1 of those dollars is missing oregon misused — nary Ponzi scheme, nary nonaccomplishment to support capable reserves, and nary nonaccomplishment to sphere the individuality of lawsuit funds 1:1. Indeed, nary of these things would beryllium true,” the institution emphasized.

Kraken CEO Dave Ripley posted connected societal media level X: “We powerfully disagree with the SEC claims, basal steadfast successful our presumption that we bash not database securities, and program to vigorously support our position. As we person seen before, the SEC argues that Kraken should ‘come successful and register’ with the agency, erstwhile determination is nary wide way to registration.”

What bash you deliberation astir the SEC suing Kraken again this twelvemonth aft the crypto speech paid $30 cardinal to settee the erstwhile lawsuit? Let america cognize successful the comments conception below.