One of the largest cryptocurrency exchange, Kraken, is under investigation by the Securities and Exchange Commission (SEC) of the United States for providing unregistered securities to American investors.
According to those familiar with the situation, the probe has evolved to the point that Kraken will probably reach a settlement with the SEC soon.
The regulator is looking into whether the cryptocurrency exchange's services to American consumers violated any securities laws. The coins and offers under investigation are unknown since the matter has not been made public.
If the regulator is satisfied, other cryptocurrency companies may contact the SEC for registration agreements as the organization has long recommended.
SEC Chair Gary Gensler urged cryptocurrency companies to register with the securities watchdog in December when speaking with Bloomberg and warned that the runway was growing smaller.
Gensler is adamant that, aside from bitcoin, practically all crypto assets are securities. He added that unregistered securities are typically offered by crypto exchanges, in violation of federal law.
The SEC's complaint against Kraken is not the exchange's first run-in with American officials. The business reached a deal with the US in late last year. Office of Foreign Assets Control (OFAC) of the Treasury Department for aiding Iranian users in dodging sanctions.
