SEC charges Kraken for operating as unregistered crypto exchange

The U.S. Securities and Exchange Commission on Monday charged cryptocurrency exchange Kraken for allegedly commingling customer money with its own while operating as an unregistered securities exchange, broker, dealer, and clearing agency.

The regulator’s complaint accused San Francisco-based Kraken of making hundreds of millions of dollars unlawfully facilitating the trading of crypto asset securities since at least September 2018.

That decision resulted in a business model rife with conflicts of interest that placed investors’ funds at risk,” Gurbir S. Grewal, director of the SEC’s Division of Enforcement, said in a statement.

The suit echoes the SEC’s charges against fellow trading platforms Binance and Coinbase (COIN) made earlier this year.

The complaint against Kraken, filed in federal district court in San Francisco, seeks injunctive relief, conduct-based injunctions, disgorgement of ill-gotten gains plus interest, and penalties.