•The SEC is probing Kraken, one of the largest cryptocurrency exchanges in the world, over possible breaches of U.S. securities law.
•The probe is reportedly in advanced stages and a settlement could be reached soon.
•If Kraken settles with the regulator, it could give the SEC more jurisdiction over the crypto industry and reinforce its bid to assume jurisdiction over crypto tokens.
SEC Probes Kraken for Possible Securities Law Violations
The U.S. Securities and Exchange Commission (SEC) is currently probing one of the world’s largest cryptocurrency exchanges, Kraken, for offering unregistered securities to customers in the United States. The probe has reached advanced stages with a conclusion expected in the coming days from which a settlement could be reached between Kraken and SEC if found guilty of breaching rules around offering securities.
Potential Effects on Crypto Industry
If Kraken settles with the regulatory body, it could potentially give more regulatory power to the SEC which could mean stricter enforcement throughout 2023 to make sure that crypto exchanges and lending platforms comply with laws set by them. This could also help solidify their bid to assume jurisdiction over crypto tokens as well as prove-of-stake cryptocurrencies according to Howey test criteria set by them last year in September.
Previous Cases Involving Crypto Exchanges
This isn’t an isolated case as similar probes have been conducted against other crypto exchanges like Coinbase last year where Gary Gensler commented on making sure these firms comply with regulations and laws set out by them but did not necessarily result into actionable enforcement measures against these firms at that time .
Consequences For Breaching Rules
If found guilty of breaching securities law in this case, Kraken may face fines, penalties or any other punishments deemed necessary by the regulator for such violations depending on degree severity and duration of breach among other factors .
With still details being scarce on this matter regarding what offerings are being probed by SEC it remains to be seen how this whole ordeal plays out but if they do find evidence pointing towards violation then we could see some strict action taken against one of worlds largest exchange which would certainly open doors for better regulation within entire industry .