Cryptocurrency exchange crackers face charges for alleged illegal practices

Photo: T. Schneider/Shutterstock

The American one Securities and Exchange Commission (SEC) has a new target in its tough policies towards the crypto industry. This time, just like at the beginning of the year, the American crypto exchange Kraken is a victim of the regulator’s questionable actions.

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Cryptocurrency Exchange Cracking Charges

After some radio silence regarding the SEC’s hostile actions, it has now happened again. Yesterday, the regulator alleged in a new indictment that Kraken’s parent companies “operated Kraken’s crypto trading platform as an unregistered securities exchange, broker, dealer and clearinghouse.” Earlier this year, the agency filed similar charges against rival crypto exchanges Binance and Coinbase.

Additionally, the SEC alleges that Kraken created “significant risk” by commingling $33 billion in customer cryptocurrencies with its own business assets. “In fact, Kraken sometimes paid operating expenses directly from bank accounts containing customer funds,” the SEC wrote in its complaint.

The SEC has listed a long list of altcoins amid allegations of illegally operating as an exchange without first registering with the regulator Securities, or effects, labeled. This was also the case with the previous charges against Binance and Coinbase. These include Cardano (ADA), Algorand (ALGO), Polygon (MATIC) and Solana (SOL). According to the indictment, squatters played a direct role in promoting these cryptocurrencies to the investing public.

The SEC is calling for Kraken to be permanently barred from operating as an unregistered exchange. The regulator is also demanding a fine and requires the exchange to return ill-gotten gains.

In February of this year, Kraken was also targeted by the SEC for illegally providing staking services. As part of the settlement, Kraken then agreed to pay $30 million and stop offering strikes to US customers.

Kraken founder warns US crypto companies

Jesse Powell, the co-founder of Kraken, has in one News on X lashed out at the SEC. He called the regulator “the US’s chief delayer” – a term used in tech circles to insult anyone who slows progress – and claimed that the SEC was unhappy with the $30 million previously paid .

In a follow-up message, Powell said the SEC’s message to Kraken and other crypto companies was clear, warning other companies to leave “the US war zone” to avoid costly litigation.

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