Cryptocurrency exchange Kraken is reportedly under investigation by the US Securities and Exchange Commission over whether it violated rules regarding securities offerings.

According to a February 8 Bloomberg report, the investigation relates to certain offerings that Kraken made to US customers. A person familiar with the matter said the investigation was in an advanced stage and could reach a settlement in the coming days.

However, at this point it is not clear which offers are being scrutinized by the securities regulator.

When asked about the alleged investigation, an SEC spokesperson told Cointelegraph, “The SEC does not comment on the existence or absence of a potential investigation.”

Kraken did not immediately respond to a request for comment.

The headquarters of the Securities and Exchange Commission in Washington. Source: Wikipedia
Gensler said in December that his main goal in regulating cryptocurrencies throughout 2023 is to get exchanges and lending platforms to comply, which he said could happen through companies registered with the Securities and Exchange Commission or through enforcement action.

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Related: Judge dismisses proposed class action lawsuit alleging sale of securities at Coinbase

Dave Ripley, CEO of Kraken, argued in September that he saw no need for Kraken to register as an exchange with the SEC because it does not offer securities, adding, “There aren’t any tokens out there that are securities we’re interested in listing.”

SEC Chairman Gary Gensler has said repeatedly, however, that he considers most cryptocurrencies other than Bitcoin

pointers down

to be securities.

However, the SEC recently acknowledged during a Jan. 30 appeals hearing in LBRY v. SEC that selling LBRY stocks (LBC) in the secondary market does not constitute a security, after convincing a judge with an argument from attorney John Deaton highlighting that the courts did not consider The underlying asset is a guarantee in similar cases.

The regulator often refers to the “Howey test” to determine what constitutes a security. The name comes from the SEC v. Howey case from 1946, which set a precedent in the United States for what transactions are considered securities.

It held that the transaction qualifies as an investment contract – and therefore a security – where there is investment in a joint venture with profits earned exclusively through the labor of others.