TL;DR
The United States Securities and Exchange Commission (SEC) has thrown another punch at the cryptocurrency industry recently, filing a lawsuit against Kraken. The regulator accused the company of operating as an unregistered securities exchange, broker, dealer, and clearing agency.
“We allege that Kraken made a business decision to reap hundreds of millions of dollars from investors rather than coming into compliance with the securities laws. That decision resulted in a business model rife with conflicts of interest that placed investors’ funds at risk,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement.
In addition, the watchdog alleged that Kraken had offered trading services with several unregistered securities. However, Ripple’s native token – XRP – is not part of the lengthy list.
Despite not being involved in the legal battle against Kraken, the asset’s price has experienced a slight decline, dropping by 2% for the past 24 hours and 6% on a weekly basis (according to CoinGecko’s data).
Apart from suing Kraken, America’s securities regulator has filed additional lawsuits against cryptocurrency firms, including Binance and Ripple.
The legal battle with the latter is among the trendiest topics in the sector, with the blockchain enterprise currently having the upper hand after winning three major (yet partial wins) over the past few months.
Most recently, Judge Analisa Torres set a schedule for remedies-related discovery and briefing, and both entities are required to complete the necessary procedures before February 12, 2024. A grand trial next spring should determine the outcome of the battle, which started almost three years ago.
