The US Securities and Exchange Commission (SEC) filed a lawsuit against Kraken, one of the leading US-based cryptocurrency exchanges. The charge against him was violation of securities laws.

In its petition in the Northern District Court of California, the institution said, “Kraken simultaneously acted as a broker, exchange, and clearinghouse in connection with crypto asset securities without registering with the SEC. “In doing so, Kraken put investors at risk and generated billions of dollars in fees and trading revenues without complying with or even acknowledging the requirements of US securities laws designed to protect them ” He said.

“The customer’s assets are linked with the company’s assets”

The SEC also alleged that he used Kraken without separating investors’ assets from his own assets. Kraken reportedly held on to more than $33 billion of customer assets while tying them to its own assets. Similarly, the exchange had more than $5 billion in cash and it was mixed with the cash assets of its clients.

The SEC is asking the court for an order permanently barring the defendants from violating securities laws and ordering them to disgorge ill-gotten gains.

Securities classification for 11 assets listed on Kraken

On the other hand, the institution emphasized in the case file that ADA, ALGO, ATOM, FIL, FLOW, ICP, MANA, MATIC, NEAR, OMG and SOL are investment contracts listed by Kraken. The assets in question in the lawsuits filed against Binance and Coinbase were also classified as investment contracts.

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