According to a recent report, Kraken’s new CEO, Dave Ripley, announced that he does not intend to register Kraken with SEC.
Security token offerings (STOs) started gaining traction in the crypto industry in 2017 and grew remarkably in 2018. The number of successful STOs increased over the years and is still growing. However, many crypto Exchanges are still skeptical about STOs and are not ready to list them.
The reluctance of the exchanges to list security tokens could be the relatively extensive regulations that restrict their technical flexibility. Another challenge with security tokens is the high compliance costs and rigorous vetting processes involved in security token listing.
Due to the factors mentioned, many exchanges are not ready to add security tokens to their offerings. Kraken is among the crypto exchanges yet to list security tokens in their offerings.
No New Security Tokens Interests Yet, Says Kraken Executive
The incoming CEO further explained that Kraken does not offer securities and has not seen any security that caught their attention. However, he also said they might reconsider if any new token emerges and attracts their interest.
Meanwhile, during Kraken’s change in leadership announcement, Ripley said his goals agree with Jesse Powell’s, who would remain connected with the company. Jesse Powell is Kraken’s outgoing CEO and co-founder, who Dave Ripley is replacing.
Jesse Powell served as the CEO of Kraken for 11 years and decided to step down on September 21. Powell said the company’s growth has increased, hence overseeing the affairs was taking a toll on him.
Meanwhile, at the Senate Committee on Banking held on September 15, the SEC chairman Gary Gensler made his stance on cryptocurrencies known. First, he noted that most cryptocurrencies are securities, so all exchanges, brokers, dealers, and custodians should be registered with the SEC.
Gensler’s notion is in contrast with Dave Ripley’s statement. Gensler further said that crypto intermediaries might sooner or later need to register with SEC and Commodities Futures Trading Commission. However, he added that some companies already registered with both.
SEC Launches Investigation On Coinbase For Allegedly Trading Unregistered Securities
Regulatory scrutiny in the crypto industry is increasing as the industry gains more advancement.
SEC started investigating Coinbase at the beginning of 2022 for allegedly trading unregistered securities. Australian digital assets lawyer Michael Bacina and Piper Alderman told reporters that the matter could seriously affect crypto exchanges.
Different lawmakers have contrary views on the SEC’s approach to crypto regulations, for example, Congressman Tom Emmer and Brad Sherman. Emmer criticized Gensler for the SEC’s approach to crypto regulations, while Sherman criticized the SEC for lack of action against big crypto exchanges.
The Foreign Assets Control Office (OFAC) of the U.S Treasury Department launched an investigation on Kraken for allegedly violating U.S sanctions. According to reports, Kraken allegedly allowed Iran-based users and other countries to trade crypto. Reports show the OFAC started investigating Kraken for Sanctions violations in 2019.
Featured image from Pixabay, Chart: TradingView.com