• The SEC is probing Kraken for a possible breach of U.S. securities law related to offering unregistered securities to customers in the United States.
• If the probe results in a settlement, the SEC could gain more jurisdiction over crypto assets.
• The outcome of this investigation could be announced in the coming days.
SEC Probes Kraken for Violation of Securities Laws
The U.S. Securities and Exchange Commission (SEC) is currently investigating cryptocurrency exchange Kraken over a possible breach of U.S. securities laws related to offering unregistered securities to its customers in the United States. If a settlement with the SEC is reached, it could grant the agency more regulatory power over crypto assets. The outcome of this investigation is expected within the next few days.
What are Unregistered Securities?
Unregistered securities are financial instruments not registered with any governing authority, such as stocks, bonds and other investment products that don’t meet certain government regulations or criteria and thus can’t be bought or sold legally on public exchanges or markets.
Kraken offers more than 185 cryptocurrencies globally, many of which aren’t available for purchase in the United States due to their lack of registration with regulators like the SEC. As part of its continuous clampdown on crypto assets it deems as securities, the regulator has launched an investigation into whether Kraken has violated rules around offering these unregistered securities to US customers .
Potential Outcome if Settlement Reached
If Kraken settles with the SEC, Chairman Gary Gensler and his team may look to reinforce their bid to assume jurisdiction over crypto tokens by issuing fines or penalties for violations of securities law — something Coinbase experienced during similar probes last year.
The outcome of this investigation into Kraken’s offerings will be watched closely by both industry participants and regulators alike as it may set a precedent when it comes to further regulation of crypto assets in the United States going forward