Benzinga - Major cryptocurrency exchange Kraken is currently under investigation by the U.S. Securities and Exchange Commission (SEC) over claims that it broke securities rules related to offerings made to American clients.
Citing an anonymous source, Bloomberg reported the SEC probe was in its advanced stages and could lead to a settlement in the near future.
The specific tokens or offerings under scrutiny were not yet clear.
Kraken, legally known as Payward Inc., and the SEC declined to comment on the investigation.
Notably, SEC probes do not always result in enforcement action, but fines and penalties for firms and individuals are possible outcomes.
Kraken, based in San Francisco, is currently ranked as the third-largest cryptocurrency exchange in the world, with a daily trading volume of roughly $650 million globally.
On its website, the company stated it supported more than 185 cryptocurrencies, though it was unclear how many are available for American clients to trade.
Additionally, 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 Kraken voluntarily disclosed the apparent violations to the government and cooperated with the investigation.
In 2021, the SEC settled with cryptocurrency exchange Poloniex LLC over claims of operating an unregistered digital asset exchange.
The SEC also has an ongoing investigation into another cryptocurrency exchange, Coinbase Global Inc. (NASDAQ: COIN), over its token listings.
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.
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