The Securities and Exchange Commission (SEC) has been labeled America’s “top decel” by the CEO of its latest target: crypto exchange Kraken.
“Today, the SEC filed a complaint alleging that Kraken operates as an unregistered national securities exchange, broker, and clearing house,” the firm announced via X on Monday night.
“We disagree with their claims and plan to vigorously defend our position.”
According to the SEC, Kraken has made “hundreds of millions of dollars” by unlawfully selling crypto tokens the commission deems as securities. By doing so, it failed to provide “significant protections” to investors.
These protections were further eroded by Kraken’s “deficient” business practices — poor internal controls and recordkeeping left users exposed to “a range of risks,” the SEC believes.
Former Kraken chief gets personal in SEC dispute
In response to the SEC’s complaint, Kraken’s former chief exec Jesse Powell called it “another attack on America.” In the heated post on X (formerly Twitter), the commission earned the CEO’s personal award for “USA’s top decel” — meaning tech doomsayer.
“The masochists haven’t been happy with the beatings they’ve been taking in NY and are shopping for a different flavor of RegDom in CA,” Powell wrote.
The Kraken chief continued with a warning for smaller crypto firms to leave the US before the SEC comes knocking on their door, too.
“The SEC knows that a real fight will likely cost $100m+, and valuable time. If you can’t afford it, get your crypto company out of the US warzone.”
Kraken has been hit by the SEC before, for offering unregistered securities through crypto lending and staking programs as part of a joint crackdown with other crypto firms. It settled for $30 million.
While the SEC alleges Kraken deliberately skirted laws to “reap” hundreds of millions from investors, the crypto exchange believes that the commission has failed to provide a “clear path to registration.” In Kraken’s firm response to the complaint, it called on Congress to provide that much-needed regulatory clarity.
“It is disappointing to see the SEC continue down its path of regulation by enforcement, which harms American consumers, stunts innovation and damages U.S. competitiveness globally,” Kraken added.