• The SEC is currently probing Kraken over a potential violation of U.S. securities law, and could reach a settlement with the exchange in the near future.
• If Kraken agrees to settle with the SEC, this could give the regulator more jurisdiction over the crypto industry.
• The probe is part of a larger strategy by the SEC to enforce regulations without providing clear guidelines for regulating crypto assets in the United States.
SEC Investigates Crypto Exchange Kraken
The U.S Securities and Exchange Commission (SEC) has begun a probe into cryptocurrency exchange Kraken, suspected of offering unregistered securities to customers in America. Reports suggest that the investigation is already at an advanced stage and a settlement between Kraken and the regulator may be announced soon.
Kraken’s Offerings Under Scrutiny
The specific offerings being scrutinized by the SEC are unknown at this time, though Kraken does offer more than 185 cryptocurrencies worldwide – many of which are not available in the US. If it is determined that unregistered securities were sold, then fines or other punishments may be handed down as punishment for breaching securities law violations.
SEC Asserting Regulatory Power
It appears that should Kraken settle with regulators, then SEC Chairman Gary Gensler will attempt to reinforce his stance on assuming jurisdiction over crypto tokens – something he has been vocal about since December 2020 when he stated that making exchanges comply would be one of his main goals throughout 2023.
Enforcement Without Guidelines
While investigations into crypto companies have become commonplace within recent years, what makes this particular case noteworthy is that despite these probes there still remain no clear guidelines from regulators on how they intend to approach regulating crypto assets in America. Even if Kraken settles with regulators it remains unclear if this will lead to any real changes in terms of regulatory clarity moving forward or if it will simply serve as an example of enforcement authority instead.
It remains to be seen whether or not Kraken will agree to settle with regulators and what kind of impact such a move would have on both their business and wider regulation within the crypto industry as a whole. Nonetheless, it does appear that enforcement rather than guidance will continue to dominate regulatory efforts for some time yet until further developments occur regarding regulatory frameworks for digital assets nationwide.