SEC Probes Kraken for Potential Securities Law Violation: What’s at Stake?

• The SEC is probing crypto exchange Kraken for offering unregistered securities to its customers in the United States.
• The probe has reached advanced stages, and a settlement between Kraken and the SEC could be announced soon.
• If a settlement is reached, the SEC could look to reinforce its bid to assume jurisdiction over crypto tokens.

SEC Investigating Kraken for Offering Unregistered Securities

The U.S. Securities and Exchange Commission (SEC) is currently probing crypto exchange Kraken over a possible breach of U.S. securities law by offering unregistered securities to its customers in the United States. Reports suggest that the probe is already in advanced stages, and the exchange could reach a settlement with the SEC in the coming days.

Kraken’s Offerings Under Scrutiny

Kraken currently offers more than 185 cryptocurrencies globally, many of which are not available in the United States. It remains unclear which offerings are being scrutinized by the securities regulator as details on the probe are scant at this time.

Possible Consequences for Kraken if Settlement Reached

If it is found that Kraken sold unregistered securities, then it could face fines, penalties or other punishments from violating securities law regulations. Although many of these probes don’t necessarily result in enforcement actions, if Kraken settles with regulators then Chairman Gary Gensler and his team may look to reinforce their bid to assume jurisdiction over crypto tokens..

SEC’s Strategy Around Crypto Regulation

The SEC’s strategy thus far has focused mainly on enforcement rather than publishing clear guidelines around regulating crypto assets within the United States. In September 2020, Gensler said that proof-of-stake cryptocurrencies may be considered as securities according to Howey test criteria but no further guidance was given on this matter by either agency at this time..


Kraken has become yet another cryptocurrency firm embroiled in an investigation by U.S authorities over alleged violations of security laws since Coinbase faced similar probes last year . The outcome of this particular case remains unknown at this time , however if a settlement is reached between Kraken and regulators then it will likely have implications for how future cases related to cryptocurrencies are handled going forward .

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