Kraken Faces Lawsuit from SEC for Unregistered Cryptocurrency Exchange Operation

IconCryptoNewsTerminal Staff23 Aug, 2024

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Kraken Faces Lawsuit from SEC for Unregistered Cryptocurrency Exchange Operation

The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Kraken, a major cryptocurrency exchange, for allegedly operating an unregistered exchange. The SEC alleges that Kraken failed to register its platform with the agency and has been offering securities in the form of cryptocurrency tokens without registering them. According to the complaint, Kraken has been offering a staking program that allowed customers to earn rewards by lending their cryptocurrency assets to the exchange. The SEC alleges that this program constituted an investment contract and should have been registered as a security. Kraken has not yet commented on the lawsuit. The SEC's action against Kraken is a significant development in the regulation of cryptocurrency exchanges. It is the first time that the agency has brought an enforcement action against a major exchange for operating an unregistered platform. The lawsuit could have a significant impact on the cryptocurrency industry and could lead to increased regulatory scrutiny of exchanges.

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