NEW YORK – Kraken, one of the world’s largest cryptocurrency exchanges, was sued on Nov 20 by the US Securities and Exchange Commission (SEC), which accused it of illegally operating as a securities exchange without first registering with the regulator.
The lawsuit is the latest step in SEC chairman Gary Gensler’s push to bring cryptocurrency under his agency’s purview, by contending that digital assets are investment contracts subject to federal securities laws.
Kraken intends to defend itself, saying that Congress should decide how to regulate cryptocurrency exchanges and calling the SEC view of digital assets “incorrect as a matter of law, false as a matter of fact, and disastrous as a matter of policy”. The San Francisco-based exchange also said the lawsuit will not affect its more than 10 million clients.
In June, the SEC filed similar lawsuits against Binance, the world’s largest cryptocurrency exchange, and Coinbase, the largest in the United States. Both are defending against the regulator’s claims.
The SEC said Payward and Payward Ventures, which operate as Kraken, have since 2018 made hundreds of millions of dollars arranging crypto purchases and sales, while turning a “blind eye” to securities laws designed to protect investors.
Kraken is also accused of having deficient internal controls and inadequate record keeping, reflected in part in its commingling customer money with its own and paying operating costs directly from customer accounts.
Failing to register has “resulted in a business model rife with conflicts of interest that placed investors’ funds at risk”, SEC enforcement chief Gurbir Grewal said in a statement. “Kraken’s choice of unlawful profits over investor protection is one we see far too often in this space.”
Kraken said the SEC complaint concedes that any alleged “commingling” amounted to “no more than Kraken spending fees it has already earned”.
The SEC also accused Binance of commingling customer funds, following a Reuters report describing such conduct. Binance has denied the commingling accusation.
The lawsuit on Nov 20 seeks a civil fine, disgorgement of ill-gotten gains and a halt to acting as an exchange without registering.
Kraken was founded in 2011. It is backed by investors including Blockchain Capital, Digital Currency Group, Hummingbird Ventures, SkyBridge and Tribe Capital. REUTERS
News Related
-
TAIPEI – A five-month rally in MediaTek looks set to extend as booming demand for smartphones and a promising new AI chip brighten the company’s outlook. The Taiwanese tech firm’s stock has soared almost 40 per cent since the end of June, outperforming a 2 per cent advance in the ...
See Details:
AI chip boom fuels MediaTek’s 40% rally, beating Qualcomm and peers
-
-
SINGAPORE – The Chinese Swimming Club (CSC) has secured a 30-year lease renewal for its sports complex at Amber Road. The move comes after four years of negotiations with the authorities, and was fully funded by the club’s reserves, CSC said on Monday. The announcement comes a week after news ...
See Details:
Chinese Swimming Club renews lease of Amber Road site for another 30 years
-
SEATTLE – US shoppers will spend as much as US$12.4 billion (S$16.6 billion) online during Cyber Monday (Nov 27), according to Adobe, which adjusted its initial forecast of US$12 billion upward based on stronger-than-expected spending on Black Friday (Nov 24) and the popularity of buy-now-pay-later features that let shoppers stretch ...
See Details:
Cyber Monday forecast boosted after record online holiday sales
-
Philanthropy can be a source of catalytic and patient capital, and as such, can play a big role in the net zero transition. Blended finance is an avenue where philanthropists can join forces with public and private funds. Genevieve Cua speaks to Anthony Gao, head of philanthropy services Asia with ...
See Details:
WealthBT Podcast: Powering up philanthropy for climate goals
-
NEW YORK – Wall Street stocks ticked down Monday, coming off a fourth straight week of gains, as investors eye retail spending and other upcoming economic data. The Dow Jones Industrial Average slipped 0.2 per cent to 35,333.47. The broad-based S&P 500 dipped 0.2 per cent to 4,550.43, while the ...
See Details:
US stocks pull back after weeks of gains
-
NEW YORK – Binance Holdings former chief executive officer Zhao Changpeng can’t return to his home in the United Arab Emirates for now, a federal judge in Seattle ruled. US District Judge Richard Jones on Monday put on hold a ruling granting the billionaire’s request to return to the UAE ...
See Details:
Former Binance CEO Zhao Changpeng must stay in US for now, judge says
-
-
-
-
Sports Illustrated scrubbed its site of AI-generated content that included bylines and photos for authors that don’t exist, according to a report.The publication — once home to authors like John Updike, Hunter Thompson and Frank DeFord – used artificial intelligence to produce poorly written product reviews and posted them under ...
See Details:
New York's cannabis board votes to settle lawsuits that have stalled legal dispensaries
-
-
Sports Illustrated scrubbed its site of AI-generated content that included bylines and photos for authors that don’t exist, according to a report.The publication — once home to authors like John Updike, Hunter Thompson and Frank DeFord – used artificial intelligence to produce poorly written product reviews and posted them under ...
See Details:
Cyber Monday sales set to reach $12.4 billion thanks to deal-hunters
-
Sports Illustrated scrubbed its site of AI-generated content that included bylines and photos for authors that don’t exist, according to a report.The publication — once home to authors like John Updike, Hunter Thompson and Frank DeFord – used artificial intelligence to produce poorly written product reviews and posted them under ...
See Details:
Texas' new power grid problem
OTHER NEWS
A Shein Group Ltd. pop-up store inside a Forever-21 store in the Times Square neighborhood of New York, US, on Friday, Nov. 10, 2023. Yuki Iwamura | Bloomberg | Getty Images ...
Read more »
EU regulators say Amazon's acquisition of vacuum maker iRobot may harm competition European regulators say Amazon’s proposed acquisition of robot vacuum maker iRobot may harm competition ByHALELUYA HADERO AP business ...
Read more »
Argentina's right-wing president-elect to meet with a top Biden adviser Argentine President-elect Javier Milei is getting a meeting with a top Biden aide ByAAMER MADHANI Associated Press and DANIEL POLITI ...
Read more »
Texas CEO and his 2 children were among 4 killed in wreck before Thanksgiving The CEO of a construction company and his two young children were among four people killed ...
Read more »
How major US stock indexes fared Monday, 11/27/2023 Stocks edged lower on Wall Street as markets look ahead to updates on inflation and how American consumers are feeling about the ...
Read more »
Moderna has hired a former FBI agent to compile internal company reports about “high-risk” celebrities — including tennis star Novak Djokovic, tech mogul Elon Musk and actor Russell Brand — ...
Read more »
Meta CEO Mark Zuckerberg and other top brass at the social media giant were well aware that millions of users on Instagram are underage, according to newly released claims in ...
Read more »