JAKARTA - The US Securities and Exchange Commission (SEC) is reportedly investigating the Kraken crypto exchange for alleged violations of the unregistered securities offering. However, what crypto tokens or offerings are the focus of the investigation is not yet clear.
Investigations by the SEC are reported to be in progress and there is a possibility that it will be resolved soon. The fall of FTX at the end of last year put the crypto industry under intense scrutiny by the SEC, and any action taken against Kraken may have had a broad impact.
Settlement with the SEC may force other crypto companies to negotiate regulations with regulators. The SEC has repeatedly stated that the majority of trafficked tokens are securities and must comply with their regulations. Investigations by the SEC do not necessarily lead to law enforcement actions, but may result in sanctions and other consequences for related companies and individuals.
Market data shows that Kraken, the world's third-largest crypto exchange with daily trading volumes of more than US$650 million (equivalent to Rp9.8 trillion) globally, has a headquarters in San Francisco. Kraken claims to support more than 185 different cryptocurrencies, but the number of cryptocurrencies that customers can actually trade in the United States is unclear.
Not the first
This is not the first time Kraken has been involved in a dispute with authorities. In late 2017, Kraken settled the case with the Treasury Department's Office of Foreign Assets Control regarding violations of US sanctions against Iran. In the agreement, Kraken committed to paying more than US$360,000 (equivalent to Rp5.4 billion) and investing US$100,000 (around RP1.5 billion) to ensure compliance with sanctions.
Meanwhile, the SEC is also investigating Kraken's rival Coinbase Global Inc, for offering tokens. In complaints against former Coinbase employees and two others, the SEC has identified a number of tokens as securities, but has not accused Coinbase of violating regulations.
Kraken has recently also closed operations in Abu Dhabi after operating for less than a year. Previously, the company stopped operating in Japan due to the weakening demand for cryptocurrencies and an increasingly stringent regulatory environment. With the SEC's ongoing investigation, Kraken appears to be still in a state of uncertainty.
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