The US Financial Markets Regulatory Commission (SEC) summoned Kraken, the world’s third-largest cryptocurrency exchange platform, to a federal court on Monday, accusing it of operating without regulatory approval.
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These legal actions appear to be a denial to the many players in the industry who have seen the SEC (Securities and Exchange Commission) soften its repression after a series of unfavorable legal decisions.
In June, the regulator had already attacked Binance, the world’s leading platform, and its runner-up Coinbase.
The lawsuit, which began Monday in federal court in San Francisco, is against Payward and Payward Ventures, the two legal entities behind Kraken.
According to the SEC, the website, which recently celebrated its 10th anniversary, offers brokerage and clearing services “without having registered with the Commission for any of these functions.”
This lack of registration “deprived investors of significant protections” that, according to the regulator, would have been made possible by SEC inspections, the retention of market data provided for in the texts and provisions against conflicts of interest.
The authorities also accuse Kraken of commingling its own funds with those of its customers and, in particular, of paying operating costs with funds from the deposits of the platform’s users.
According to the SEC, the companies’ auditor reported that there was a “significant risk of loss” to customers as a result of these practices.
For the SEC, Kraken’s business model is “riddled with conflicts of interest that put investors’ funds at risk,” argued Gurbir Grewal, director of the enforcement division, the SEC said.
In a reaction published on its website, the platform reiterates that the SEC’s position is a misinterpretation of the texts and that it does not need To with the regulator.
“These developments have no impact on the products we offer and we will continue to provide our services to our customers without interruption,” Kraken added.
The world of cryptocurrencies had recently regained color, with observers expecting a green light from the SEC to market a new cryptocurrency investment product.
These are ETFs or index funds that invest in Bitcoins and that savers can buy or sell at any time without having to use a cryptocurrency exchange platform, which would likely democratize digital currency investing.
Hopes for a softening of the SEC’s position were based in particular on two legal setbacks in October that undermined the regulator’s desire to establish itself as the benchmark authority for cryptocurrencies.