Hey, have you heard about the tussle between the SEC (U.S. Securities and Exchange Commission) and Kraken? The SEC has filed charges against Kraken in court. It’s about Kraken allegedly mixing their funds with those of their clients and not registering with the appropriate authorities as required. These kinds of issues are common in the finance world, but this is a serious matter.
Kraken Fights Back
Kraken’s spokesperson told the media that the company disagrees with the SEC’s accusations and plans to defend themselves in court. They argue that, as a cryptocurrency exchange, they shouldn’t be treated like a traditional stock exchange because they never traded stocks or bonds.
However, the SEC points out that Kraken traded 16 cryptocurrencies, which they consider securities (like cardano, algorand). They also claim that Kraken had weak internal control, resulting in the mixing of client assets (up to $33 billion) with the company’s own funds, creating a risk of loss for users. Moreover, Kraken allegedly used clients’ money for its operational expenses. The SEC is demanding that the company pay penalties and return the ill-gotten gains.
A Recurring Theme
Kraken is not the only one facing such issues. Earlier, other exchanges like Coinbase and Binance faced similar charges. Jesse Powell, co-founder of Kraken, doesn’t mince words. He claims that the SEC is hindering the development of the cryptocurrency market in the USA. He recalled that Kraken had already paid millions of dollars in a settlement with the SEC.
What’s Next about Kraken?
Kraken had previous run-ins with the SEC and agreed to a settlement, paying $30 million. They also stopped offering certain cryptocurrency services in the U.S. Now, it’s interesting to see how this will unfold. Will Kraken fight back against the SEC, or will they opt for another settlement?