SEC Sues Crypto Exchange Kraken

The Securities and Exchange Commission sued crypto exchange Kraken on Monday, alleging that the company failed to register as a national securities exchange, broker-dealer and clearing agency and has commingled billions of dollars in customer assets with its own.

The lawsuit follows similar legal action taken by the SEC against other crypto exchanges, including Coinbase and Binance, for operating as unregistered securities exchanges. In the Kraken lawsuit, lawyers for the SEC stated that Kraken’s independent auditor wrote in its 2022 report that the company put customer holdings at “a significant risk of loss” with how they held their crypto assets. The regulator also alleged that popular tokens that trade on Kraken such as solana, polygon and cardano are unregistered securities. A Kraken spokesperson said that the firm disagrees with the complaint and stands firm in their view “that we do not list securities and plan to vigorously defend our position.”

Kraken agreed to pay a $30 million fine and shut down its U.S. staking services in a settlement with the SEC in February after the regulator alleged it sold unregistered securities through the services.