The Securities and Exchange Commission (SEC) today charged Payward Inc. and Payward Ventures Inc., together known as Kraken, with operating Kraken’s crypto trading platform as an unregistered securities exchange, broker, dealer, and clearing agency.
The SEC alleges that since at least September 2018, Kraken has offered and sold securities without registering with the SEC or complying with the securities laws. The SEC also alleges that Kraken has failed to implement adequate safeguards to protect its customers’ funds and assets.
“Kraken made a business decision to reap hundreds of millions of dollars from investors rather than coming into compliance with the securities laws,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement. “That decision resulted in a business model rife with conflicts of interest that placed investors’ funds at risk.”
The SEC’s complaint seeks injunctive relief, conduct-based injunctions, disgorgement of ill-gotten gains plus interest, and penalties.