SEC investigating major criptocurrency exchange Kraken

The U.S. Securities and Exchange Commission SEC is investigating major criptocurrency exchange Kraken, which is currently under investigation by the US Securities and Exchange Commission over claims that it broke securities rules related to offerings made to American clients.

According to Bloomberg, the SEC probe was in its advanced stages and could lead to a settlement in the near future, according to an anonymous source.

The specific tokens or offerings under scrutiny were not yet clear.

Kraken, legally known as Payward Inc., and the SEC didn't want to comment on the investigation.

Fines and penalties for firms and individuals are possible outcomes that are not always the result of the SEC probes.

Kraken, based in San Francisco, is currently ranked as the third-largest criptocurrency exchange in the world, with a daily trading volume of $650 million.

The company stated it supported more than 185 cryptocurrencies on its website, though it was not clear how many are available for American clients to trade.

Users could earn rewards on certain holdings through a process known as staking.

Kraken reached a separate settlement with the Treasury's Office of Foreign Assets Control OFAC last year over allegations of violating U.S. sanctions against Iran.

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The company agreed to pay more than $360,000 and invest $100,000 in sanctions compliance.

OFAC stated that Kraken voluntarily disclosed the apparent violations to the government and cooperated with the investigation.

The SEC settled with Poloniex LLC in 2021 over claims of operating an unregistered digital asset exchange.

The SEC has an ongoing investigation into another coin exchange, Coinbase Global Inc. The agency had not accused Coinbase of offering unregistered securities, but it identified several tokens listed on the exchange as securities in a lawsuit against a former Coinbase employee and two others as part of an insider trading case.