On Monday, the US Securities and Exchange Commission filed a lawsuit against Kraken for allegedly operating as an illegal securities exchange without proper registration.
This is part of the agency’s efforts, led by Chairman Gary Gensler, to regulate the cryptocurrency industry by arguing that digital assets should be subject to federal securities laws as they are considered investment contracts.
Kraken plans to dispute these claims, stating that regulations for cryptocurrency exchanges should be determined by Congress, and criticizing the SEC’s view on digital assets as incorrect and harmful.
Nonetheless, the exchange, based in San Francisco, reassures its more than 10 million customers that the lawsuit will not affect their accounts.
The SEC has also previously filed similar lawsuits against Binance, the largest cryptocurrency exchange in the world, and Coinbase, the largest in the U.S., both of which are also fighting against the allegations.