The US Securities and Exchange Commission (SEC) filed a federal lawsuit against the world’s third-largest cryptocurrency exchange on Monday, accusing it of operating without supervisory approval.
The action against Kraken by the financial markets regulator will likely pour cold water on the hopes of many firms in the sector that it was taking its foot off the gas when it came to regulation after a series of unfavorable court rulings.
The SEC took legal action in June this year against Binance — the world’s leading crypto exchange — as well as the runner-up, Coinbase.
The proceedings against Kraken began on Monday in federal court in San Francisco, targeting Payward and Payward Ventures, the two legal entities behind the exchange.
According to the SEC, the site, which recently celebrated its 10th anniversary, “intertwines the traditional services of an exchange, broker, dealer, and clearing agency without having registered any of those functions with the Commission as required by law.”
This failure to register “deprived investors of significant protections,” which, according to the regulator, should have included inspection by the SEC, record keeping…
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