The United States Securities and Exchange Commission (SEC) announced Monday that it has filed charges against cryptocurrency exchange Kraken, just months after settling previous charges against the firm.
In a press release, the SEC alleged that Kraken’s parent companies were “operating Kraken’s crypto trading platform as an unregistered securities exchange, broker, dealer, and clearing agency.” The agency filed similar charges against rival exchange Coinbase earlier this year.
Pressingly, the SEC alleges that Kraken commingled customer assets with company funds, including paying its own bills from an account that held customer funds. Per the SEC, such an approach created “what its own auditor had identified as ‘a significant risk of loss’ to its customers.”
In the complaint, the SEC alleged that the following cryptocurrencies are securities: ADA, ALGO, ATOM, FIL, FLOW, ICP, MANA, MATIC, NEAR, OMG, and SOL.
“We allege that Kraken made a business decision to reap hundreds of millions of dollars from investors rather than coming into compliance with the securities laws. That decision resulted in a business model rife with conflicts of interest that placed investors’ funds at risk,” said Gurbir S. Grewal, the SEC’s Director of the Division of Enforcement. “Kraken’s choice of unlawful profits over investor protection is one we see far too often in this space, and today we’re both holding Kraken accountable for its misconduct and sending a message to others to come into compliance.”
Decrypt reached out to Kraken for comment regarding the charges but did not immediately receive a response.
This story is developing and will be updated with additional information.
Stay on top of crypto news, get daily updates in your inbox.
