SEC sued Kraken, causing the collapse of Cardano, Solana and other cryptocurrencies

The U.S. Securities and Exchange Commission (SEC) is suing cryptocurrency broker Kraken for the second time in 2023. According to a note released on Monday (20th), the broker was suspected of violating multiple U.S. securities laws.

In response to the lawsuit, Kraken said it “disagrees with the SEC’s assertions” and plans to “vigorously defend” its position. As a bright spot, the broker pointed to the lack of clear regulation in the cryptocurrency industry.

Other brokers sued by the SEC this year include Coinbase and Binance, considered two of the largest in the industry. The U.S. Securities and Exchange Commission (SEC) is the same agency responsible for reviewing Bitcoin ETF applications from giants like BlackRock and Fidelity.

SEC sues broker Kraken for second time this year

Also in February, the SEC fined Kraken R$158 million. According to the charges, the broker provided cryptocurrency staking services without proper authorization.

Although Kraken paid this million dollar fine, perhaps thinking that it would never see the SEC again, the Commission sued the broker again this Monday (20).

However, things now look very different the second time around. On the one hand, the SEC’s charges are multiple. As an example, the Commission cited Kraken’s function as an “exchange” for trading securities. Another allegation is that the brokerage acted as a “broker,” “dealer,” and “clearing agency.”

A 90-page document details some of Kraken’s practices and cites multiple currencies as securities, including Cardano (ADA), Filecoin (FIL), Decentraland (MANA), Polygon (MATIC), Solana (SOL) wait.

Many of them have been cited in lawsuits against other brokers. Even so, the operation of the above-mentioned projects still declined on Tuesday (21st). Solana (SOL) fell 5.9% and Polygon (MATIC) fell 6.6%.

Another highlight of the filing is Kraken’s revenue. The brokerage made $43 billion (208 billion reais) in profits between 2020 and 2021, according to SEC data. It is also mentioned that it serves more than 9 million customers in more than 190 countries.

Kraken disagrees with SEC charges and says it will fight

While the process is different from the first fine, Kraken is also reluctant to press charges like it was the first time. The broker quickly responded to the committee on its social networks and official blog.

“We disagree with their assertions and plan to vigorously defend our position.”

Kraken continued: “The SEC has repeatedly invited cryptocurrency exchanges to register, but there is no single law to support its position and no clear path to registration.” He noted that it will continue to advocate for cryptocurrency market regulation to mitigate risks and Provide benefits to investors.

Ultimately, Kraken said the process had no impact on its services and will continue to work normally.

As of this writing, the broker’s spot market daily trading volume is $1.1 billion, with 241 tradable cryptocurrencies. This broker serves Brazilians despite not using our currency, the real.

Information source: compiled from LIVECOINS by 0x Information.Copyright belongs to the author and may not be reproduced without permission

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