SEC Charges Kraken for Operating as an Unregistered Securities Exchange, Broker, Dealer, and Clearing Agency

Press release

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SEC Charges Kraken for Operating as an Unregistered Securities Exchange, Broker, Dealer, and Clearing Agency

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SEC claims Kraken commingled its customers’ money with its own, including paying operational expenses directly from accounts that hold customer cash

SEC claims that Kraken made a business decision to reap hundreds of millions of dollars from investors

Kraken also allegedly commingles its customers’ crypto assets with its own, creating what its own auditor had identified as “a significant risk of loss” to its customers.

SEC claims that Kraken’s alleged failure to register as Securities Exchange, Broker, Dealer, and Clearing Agency has deprived investors of significant protections, including inspection by the SEC, recordkeeping requirements, and safeguards against conflicts of interest, among others

The Securities and Exchange Commission charged Kraken with operating Kraken’s crypto trading platform as an unregistered securities exchange, broker, dealer, and clearing agency

Publish date

11

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2023

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12

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The Securities and Exchange Commission today charged Payward Inc. and Payward Ventures Inc., together known as Kraken, with operating Kraken’s crypto trading platform as an unregistered securities exchange, broker, dealer, and clearing agency

Kraken commingles its customers’ money with its own, including paying operational expenses directly from accounts that hold customer cash.

The SEC alleges that Kraken intertwines the traditional services of an exchange, broker, dealer, and clearing agency without having registered any of those functions with the Commission as required by law. Kraken’s alleged failure to register these functions has deprived investors of significant protections, including inspection by the SEC, recordkeeping requirements, and safeguards against conflicts of interest, among others.

Kraken also allegedly commingles its customers’ crypto assets with its own, creating what its own auditor had identified as “a significant risk of loss” to its customers.

“We allege that Kraken made a business decision to reap hundreds of millions of dollars from investors rather than coming into compliance with the securities laws

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SEC Charges Kraken for Operating as an Unregistered Securities Exchange, Broker, Dealer, and Clearing Agency

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SEC Charges Kraken for Operating as an Unregistered Securities Exchange, Broker, Dealer, and Clearing Agency

Web URL

https://www.sec.gov/news/press-release/2023-237

Referenced by

SEC claims that Kraken made a business decision to reap hundreds of millions of dollars from investors

Crypto

Kraken commingles its customers’ money with its own, including paying operational expenses directly from accounts that hold customer cash.

Crypto

SEC claims Kraken commingled its customers’ money with its own, including paying operational expenses directly from accounts that hold customer cash

Crypto