US watchdog sues crypto trading platform Kraken

By Ovunc Kutlu

ISTANBUL (AA) - The US Securities and Exchange Commission (SEC) sued American cryptocurrency exchange platform Kraken for operating online trading without registering.

"Without registering with the SEC in any capacity, Kraken has simultaneously acted as a broker, dealer, exchange and clearing agency with respect to these crypto asset securities," said the filing the SEC made Monday in the US District Court for the Northern District of California.

"In doing so, Kraken has created risk for investors and taken in billions of dollars in fees and trading revenue from investors without adhering to or even recognizing the requirements of the U.S. securities laws that are designed to protect investors," it added.

The SEC argued that Kraken sometimes has held customers' crypto assets valued at more than $33 billion, but it has "commingled" these assets with its own, which caused a "significant risk of loss" for its customers.

"Similarly, Kraken has held at times more than $5 billion worth of its customers’ cash, and it also commingles some of its customers’ cash with some of its own," said the filing.

Kraken, in a deal with the SEC in February, agreed to end its crypto-staking operations in the US and pay a $30 million settlement after failing to register the offer and sale of their crypto asset staking-as-a-service program.