The Securities and Exchange Commission (SEC) has filed a lawsuit against Kraken, a prominent cryptocurrency exchange, accusing it of operating without proper registration as a securities exchange. This development has caused significant disruption within the crypto space, particularly in light of the recent Binance-DoJ situation.Kraken, based in San Francisco, has strongly defended its operations, arguing that the regulation of cryptocurrency exchanges falls under the jurisdiction of Congress, which has yet to pass any laws on the matter. The exchange believes that the lawsuit is legally flawed and poorly considered. It has reassured its large customer base of over 10 million users that its services will not be affected.The lawsuit specifically targets PAYWARD INC. and PAYWARD VENTURES INC., which have been operating as Kraken since 2018. The SEC alleges that Kraken conducted crypto trades without adhering to appropriate securities laws. The commission has highlighted issues such as inadequate internal controls, improper record-keeping, failure to prioritize investor safety, and the mingling of customer and company assets.This case is part of a broader strategy by SEC Chairman Gary Gensler to regulate the crypto market using traditional rules. Similar actions have been taken against other major crypto exchanges, including Binance and Coinbase, as the SEC seeks to enforce federal securities laws on digital assets and establish a precedent in the industry.Kraken vehemently denies the SEC’s charges, particularly regarding the “commingling” of funds, which it claims only applies to earning fee payments. The SEC is seeking financial penalties, the return of profits, and measures to prevent the repetition of fraudulent schemes. The outcome of Kraken’s lawsuit could have a significant impact on the legislation governing the regulation of cryptocurrency exchanges and spark an important debate about the role of legislative institutions in the expanding digital currency market.

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Information	Details
Geography	North America
Countries	🇺🇸
Sentiment	neutral
Relevance Score	1
People	Gary Gensler
Companies	Congress, DoJ, Binance, SEC, Kraken
Currencies	None
Securities	None