The Securities and Exchange Commission of the United States has recently launched a probe against one of the largest cryptocurrency exchange platforms.
The name of the particular platform is Kraken, which has been around in the cryptocurrency industry for an extremely long time.
The Kraken exchange was founded back in 2011 and it is the same time when Bitcoin trading began. It has been around in cryptocurrency for a very long time offering trading opportunities to crypto traders.
US SEC Goes Against Kraken
Turns out, the US SEC has decided to take one of the oldest cryptocurrency exchanges to court. It has become quite common for the US SEC to take cryptocurrency entities to court for selling securities.
Out of all the claims that the regulator has made against the crypto firms, most of them are pertaining to the firms selling unregistered securities.
According to the regulator, many firms are involved in selling cryptocurrencies that are not registered at all.
The US SEC claims that cryptocurrencies are securities. On several occasions, the cryptocurrency industry has contested such claims and has asked the US SEC to come up with a proper explanation and proof on the matter.
They have demanded that the US regulator must take the matter to Congress to have its perception of crypto being securities into law.
However, the US SEC does not do that at all instead, it takes the firms and crypto projects to court claiming they are involved in selling unregistered securities.
This time, the US SEC has gone against Kraken and it has made the same claim against the exchange.
According to the regulator, the Kraken exchange was and is involved in selling unregistered securities to investors from the United States.
Expectations from Kraken
The people familiar with the matter as well as the market analysts have shared their speculations on the matter.
It has been revealed that the US SEC has strong evidence against the Kraken exchange in regard to their claim. It is highly likely that the evidence that the regulator has will earn it a victory against the crypto exchange.
The analysts are afraid that the exchange may be found guilty. This is the reason why they are speculating that the Kraken exchange may resort to settling with the regulator.
This would mean that the exchange has admitted its fault and is going with the option of dealing with the matter outside of the court.
If that happens, it may badly hurt the reputation of the Kraken exchange among investors and stakeholders.
The reporting firms provided updates on the matter on Wednesday.
Investigation is Underway
For now, the investigation is underway and the US SEC is trying to establish where the exchange stands in terms of offering assets to US investors.
As per the regulator, there is a high chance that the exchange breached the securities laws while offering/soliciting assets to the locals in the United States.
The regulator has remained very discreet about their investigation and scrutiny. They have not provided much information on the matter.
It is yet to be confirmed, which tokens the regulator is currently investigating. It is expected that the US SEC may release more information about their claim in the upcoming days.
The Cryptocurrency Community is Not Happy
The crypto community is not taking lightly the matter as they are concerned about the settlement rumors.
According to crypto experts, if the Kraken exchange does settle with the US SEC, it will end up sending the wrong message across the crypto-verse.
This would mean that the Kraken exchange would go to the US SEC to register the disputed cryptocurrencies as securities.
This may make things extremely complicated for the entire cryptocurrency industry. If that happens, other exchanges and crypto firms will feel like doing the same, setting a wrong precedent.
Instead of fighting against the policies of the US SEC and proving them wrong in court, the crypto industry will give in to the regulator’s pressure.