Kraken, one of the world’s largest cryptocurrency exchanges, was sued Monday by the US Securities and Exchange Commission, which accused it of illegally operating as a securities exchange without first registering with regulators.
The suit, filed in federal court in San Francisco, is the latest step in SEC Chairman Gary Gensler’s quest to bring cryptocurrencies within the purview of his agency, arguing that digital assets are investment contracts subject to federal securities laws.
Kraken was also accused of having deficient internal controls and inadequate record keeping.
The exchange intends to defend itself, saying Congress should decide how to regulate cryptocurrency exchanges and calling the SEC’s view of digital assets “incorrect as a matter of law, false as a matter of fact, and disastrous as a matter of policy.”