Kraken was targeted by the SEC due to lack of registration

The US Securities and Exchange Commission (SEC) has filed a lawsuit against the Kraken crypto exchange. The regulator accused her of operating without a proper license, as well as mixing client and corporate funds.

The lawsuit states that since 2018, Kraken has operated unlawfully as a securities exchange, broker, dealer and clearing agency. The SEC said the trading platform mixed up to $33 billion of clients' assets with its own. According to the regulator, this could lead to losses of funds.

“We believe that Kraken paid its operating expenses from accounts that hold customer funds,” the regulator said in a statement.

The Commission also designated a number of cryptocurrencies traded on the exchange as unregistered securities: ADA, AXS, ALGO, ATOM, CHZ, COTI, DASH, FIL, FLOW, ICP, MANA, MATIC, NEAR, OMG, SAND and SOL.

Let us recall that in June 2023, the crypto exchanges Binance and Coinbase faced similar SEC lawsuits. As with Kraken, they were accused of violating securities laws. The two companies are still in the process of settling the case.

The SEC's filing asks that Kraken be permanently banned from operating as an unregistered exchange. In addition, the regulator announced the need to pay a fine and return part of the funds obtained illegally.

Kraken does not agree with the SEC's accusations and plans to challenge the lawsuit:

“We strongly disagree with the SEC's allegations and are of the opinion that we are not in the business of listing securities. We intend to vigorously defend our position,” said Kraken CEO Dave Ripley.