Kraken Accused by SEC of Operating Unregistered Platform, Improperly Mixing Customer Funds
The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against crypto exchange Kraken, alleging that the company amalgamated customer and corporate funds while acting as an unregistered broker, clearing agency, and dealer. The SEC accuses Kraken of risking up to $33 billion by mixing customer crypto assets with their own, as reported by Kraken's independent auditor. Furthermore, the agency claims that Kraken engaged in similar behavior with customer cash, even using the money to cover operational expenses. The lawsuit also implicates Kraken in promoting unregistered tokens like Algorand, Polygon's MATIC, and NEAR. Kraken, as claimed by the SEC, operated similarly to Binance and Coinbase, which previously faced lawsuits for running unregistered operations. The SEC seeks to permanently ban Kraken from operating as an unregistered exchange along with a fine and repayment of ill-gotten gains. Kraken disputes these allegations, advocating for more effective regulation and contesting the SEC's "regulation by enforcement" approach.
