The operation of Kraken’s cryptocurrency trading platform as an unregistered securities exchange, broker, dealer, and clearing agency was charged by the Securities and Exchange Commission (SEC) today against Payward Inc. and Payward Ventures Inc., collectively known as Kraken.
According to the SEC, Kraken has been offering and selling securities without being registered with the SEC or abiding by the securities rules at least since September 2018. Additionally, the SEC claims that Kraken has not put in place sufficient security measures to preserve the money and belongings of its clients.
Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, stated, “Kraken made a business decision to reap hundreds of millions of dollars from investors rather than coming into compliance with the securities laws.” “That choice led to a business model full of conflicts of interest that endangered the money of investors.”
Injunctive relief, conduct-based injunctions, disgorgement of ill-gotten earnings with interest, and penalties are all requested in the SEC’s lawsuit.