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Kraken Crypto Exchange Probed by SEC Over Offering Unregulated Securities

1 min
Updated by Kyle Baird
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In Brief

  • Kraken is the latest crypto exchange to be targeted by the SEC.
  • Bloomberg reported that the investigation was at an “advanced stage” and “could lead to a settlement in coming days.”
  • Kraken agreed to pay the U.S. Treasury Department’s Office of Foreign Assets Control $362,000 for apparent violations of sanctions against Iran last year.
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Kraken, one of the largest cryptocurrency exchanges by volume, is facing scrutiny from the U.S. Securities and Exchange Commission (SEC). This is not the first time the crypto exchange has had run-ins with regulators. 

Cryptocurrency exchange Kraken has come under the Securities and Exchange Commission (SEC) radar. The regulator is looking at whether the said exchange offered unregistered securities to American clients.

A Bloomberg report on Feb. 9 asserted that the investigation had reached an “advanced stage.” Although the details remain blurry, a settlement could soon be reached. 

Risks involved in trading unregistered securities

Securities are considered higher risk because they are not subject to the same level of regulatory oversight as other financial instruments. Nevertheless, Dave Ripley, the new CEO at Kraken, wouldn’t register with the SEC despite calls from chairman Gary Gensler for crypto platforms to do so. Binance, the largest crypto exchange, has also faced repercussions for trading unregistered securities. 

Once the investigation is complete and the SEC releases any findings, it’s easier to say the outcome. The investigation could lead to fines, penalties, or other punishments if the SEC finds violations of securities laws.

Kraken is currently the third largest crypto exchange by volume on CoinMarketCap. Needless to say, the ongoing probe from regulators is not a good look for the industry. Just two months ago, Kraken settled a case with OFAC over sanctions violations and paid a $362,000 penalty. 

Harsh macro conditions

The crypto market suffered a severe winter last year following the collapse of institutions such as FTX. This affected many exchanges, including Kraken. The platform recently laid off 30% of its workforce. 

Allegedly, the reduction was independent of events like the FTX implosion, according to the head of the strategy at Kraken. 


In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content.

Shubham Pandey
An engineer and an accountant by degree, Shubham ventured into the crypto world to pursue his passion. He believes digital currencies will redefine our economies in the decades to...