The SEC has cast its scrutinizing gaze on the San Francisco-based cryptocurrency exchange, Kraken, suspecting potential violations of securities laws, say sources.
According to Bloomberg on February 9, 2023, the SEC’s probe into Kraken’s dealings has reached a pivotal point. Sources indicate that it has progressed to an “advanced stage.”
Furthermore, an anonymous source says that the outcome of the investigation could result in a settlement in the near future.
Not their first brush with the law
The current investigation by the SEC marks yet another brush with federal authorities for Kraken, as they’ve already faced similar allegations in the past.
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Back in November 2022, they reached an agreement with the U.S. Treasury Department’s Office of Foreign Assets Control to pay a sum of $362,158.70 as a penalty for seemingly breaking sanctions imposed on Iran.
Moreover, in September 2022, the soon-to-be CEO of Kraken, Dave Ripley, made it clear that the exchange had no intention of removing any coins or tokens deemed as securities by the SEC.
SEC tightens its grip on securities
January 2023 saw the regulator take aim at Genesis and Gemini, accusing them of providing unregistered securities.
Gary Gensler, the Chairman of the SEC, has shared his perspective on the world of cryptocurrencies, asserting that many, with the exception of Bitcoin, fall under the classification of unregistered securities.
More so, in 2022, they initiated a total of 30 enforcement actions related to cryptocurrencies – a 50% increase compared to the previous year.
Gary Gensler has pointed out the pervasive non-compliance in the cryptocurrency sphere and emphasized the importance of protecting investors. He acknowledged that while clear laws exist to guard consumers, there is still a need for greater enforcement and regulation in the crypto world.
In the wake of the dramatic crash of FTX last year, U.S. regulators have trained their sights on digital asset exchanges, observing their every move closely.