SEC Probes Crypto Exchange Kraken for Violating Securities Laws

• The SEC is probing Kraken over a possible breach of U.S. securities law.
• Reports suggest that the probe is already in advanced stages, and the exchange could reach a settlement with the SEC in the coming days.
• If Kraken settles with the regulatory, Gensler and his team could potentially look to reinforce the agency’s bid to assume jurisdiction over crypto tokens.

SEC Probing Kraken for Offering Unregistered Securities

The SEC is probing Kraken over a possible breach of U.S. securities law, with reports suggesting that the investigation has reached an advanced stage and that a possible settlement may be reached in the coming days.

SEC Could Exercise More Jurisdiction Over Crypto Industry

Kraken’s possible settlement with the SEC could pave the way for greater regulatory power of crypto assets by allowing Gensler and his team to increase their jurisdiction over cryptocurrency-related activities in the United States.

SEC Taking Enforcement Route on Crypto Firms

The SEC has been taking enforcement action against crypto firms without providing clear guidelines on how to regulate cryptocurrency assets in America. In September 2020, Gensler said proof-of-stake cryptocurrencies could be considered securities according to Howey test criteria.

Commodity Futures Trading Commission (CFTC)

The Commodity Futures Trading Commission (CFTC) has taken a different approach than its sister agency when it comes to regulating digital assets in America. The CFTC views cryptocurrencies as commodities rather than securities and therefore regulates them differently from other types of digital assets that are deemed securities by federal agencies like the SEC or FINRA.

Continued Clamping Down on Crypto Assets

The SEC’s continued clampdown of crypto assets it deems as securities shows no signs of stopping anytime soon, and other exchanges may face similar probes if they offer unregistered offerings to customers residing in America.