Major US Cryptocurrency Exchange to Face SEC: 11 Altcoins Involved!
US-based cryptocurrency exchange Kraken will face SEC in a lawsuit involving 11 altcoins.
Crypto exchange Kraken’s request to dismiss the lawsuit filed by the US Securities and Exchange Commission (SEC) has been denied.
The SEC alleges that the exchange operated as an unregistered securities exchange, broker and clearinghouse, and committed irregularities by mismanaging customer information and funds.
“The SEC has plausibly alleged that certain cryptocurrency transactions facilitated by Kraken on its network constitute investment contracts and are therefore subject to securities laws,” US District Judge William H. Orrick wrote in an opinion published in San Francisco federal court on Friday.
Judge Orrick noted that Kraken earned more than $43 million in revenue from its trading desk between 2020 and 2021, some of which it earned by charging transaction fees and not imposing restrictions on trading.
The SEC alleged in a lawsuit filed against Kraken on November 20, 2023 that the exchange operated as an unregistered securities exchange, broker, and clearinghouse. The agency also alleged that Kraken committed violations by mixing customer assets with its own assets and mismanaging customer information.
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