TechFlow reported, according to CoinDesk, the U.S. Securities and Exchange Commission (SEC) on Monday charged cryptocurrency exchange Kraken with commingling customer funds with corporate funds and operating as an unregistered broker, clearing agency, and trading platform. The SEC alleged that Kraken violated federal securities laws, citing a report from Kraken's independent audit stating that Kraken mixed up to $33 billion in customer crypto assets with corporate-owned assets, creating "significant risks."
The lawsuit stated that Kraken sometimes held over $5 billion in customer cash and also commingled certain customer cash with its own corporate cash. In fact, Kraken at times directly used bank accounts holding customer cash to pay operational expenses.
Additionally, the SEC claimed that Kraken operated an unregistered broker-dealer, clearing agency, and exchange—a similar set of allegations to those the SEC brought earlier this year against Binance and Coinbase.
