The U.S. Securities and Exchange Commission (SEC) has been investigating crypto exchange Kraken for potential rule violations regarding securities offerings. Kraken is one of the largest US exchanges.
A recent report from Bloomberg on Feb. 8th revealed an investigation involving specific offerings made by Kraken to its American clientele is underway. According to a source familiar with the situation expects, a resolution to reach soon as the investigation nears its final stages.
At present, it remains uncertain which offerings are being investigated by the securities regulator. An SEC spokesperson declined to comment when asked about the rumored investigation, stating that the SEC does not make public statements about the existence or absence of ongoing investigations.
Additionally, the company Kraken has yet to offer a response to the comment. However, SEC Chair Gary Gensler’s aim for crypto regulation in 2023 is to enforce compliance with crypto exchanges and lending platforms through registration with SEC or enforcement actions.
Kraken CEO Dave Ripley stated that registering with the SEC was unnecessary as the exchange doesn’t deal in securities. Furthermore, he emphasized their disinterest in listing tokens classified as securities.
Gensler Emphasizes Most Crypto Except Bitcoin Are Securities. Moreover, SEC conceded LBC secondary market sales aren’t securities after the lawyer’s argument convinced the judge.
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The regulator uses the “Howey test” to determine securities, named after the 1946 SEC v Howey case, which set a precedent for securities transactions in the U.S. In addition, the Howey Test: Defining Investment Contracts and Securities.