By Ben Glickman

The Securities and Exchange Commission charged cryptocurrency trading platform Kraken with operating as an unregistered securities exchange.

The charges are the latest effort by regulators to crack down on crypto companies, some of which the SEC views as illegally selling securities without registering with the commission.

Kraken didn't immediately respond to requests for comment on Monday.

The complaint by regulators alleges that Kraken, the second- largest crypto exchange in the U.S., commingles its own cash and crypto with that of its customers, presenting greater risk of loss to its customers.

The SEC complaint alleges that Kraken unlawfully allowed the purchase and sale of crypto asset securities and acted as an exchange, broker, dealer and clearing agency without being registered with the SEC for any of those functions.

Kraken, operated by Payward Inc., agreed in February to stop offering crypto staking services and pay $30 million in penalties to the SEC, settling prior charges. The company didn't admit or deny the allegations of the prior charges.

The SEC's complaint was filed in the federal district court in San Francisco and seeks injunctive relief, conduct-based injunctions, disgorgement of ill-gotten gains plus interest and penalties.

Write to Ben Glickman at ben.glickman@wsj.com

(END) Dow Jones Newswires

November 20, 2023 18:42 ET (23:42 GMT)